The largest bank by deposits just lost its chief financial officer and just hired one of the most connected regulatory lawyers in the U.S.
Both events are alarming.
The bank says that Charles Noski requested to step aside due to family illness. There’s no doubt some truth in this: a family member is ill, and Noski probably volunteered his resignation. But it comes on the back of some very troubling developments:
- Earlier this month we learned that Bank of America’s announcement that the government had denied its insane request to raise its dividend had not been reviewed by Noski before it was made public. No one has offered a credible explanation for this lapse in internal controls.
- Bank of America recently announced that it was going to start charging some 5 percent of its credit card customers a brand new $59 annual fee. This is a breathtakingly obvious attempt to drive $180 million in profits through a loophole in Dodd-Frank—which prohibited interest rate increases unless customers were seriously delinquent, but left open the possibility of random fee hikes.
- Bank of America has been estimating for three quarters that it is more than two-thirds through the wave of repurchase requests on soured home loans, and that the total losses will not amount to more than $10 billion. This quarter it provided for just $1 billion in mortgage repurchase and litigation expenses—compared with $2.2 billion for JP Morgan Chase in the first quarter. Does anyone believe that the bank with exposure to Countrywide’s loans is better off than JP Morgan?
via cnbc.com
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