Sunday, September 16, 2007

Bad Business at Bank of America

Well before Bank of America (BOA) began giving out credit cards to people without social security numbers (a/k/a “ILLEGAL ALIENS”) and lost over 1 million customer’s banking records, I’d refused to either be personally involved with, or buy any stock in that poorly run entity.

Back in 2005, when they began giving out credit cards to people without social security cards (poor credit risks), you knew that they’d have to protect themselves from those losses, just as large banks like Citi and Chase use usurious credit card interest here at home to partly offset poor Third World debt.

This week BOA raised its ATM fees to $3 and if you don’t think that has something to do with recouping some of the money lost from all those credit cards doled out to all those “undocumented customers,” THINK AGAIN!

Apparently BOA’s “business plan” is rooted in a misguided form of humanism, that goes, “We at Bank of America believe that illegal immigrants are Americans too. Most of them work hard and at often thankless, tedious, dangerous jobs and usually for very low pay. We feel we owe them something more, so we’re going to offer them credit cards even though their credit is generally poor, what without steady work and all, and we’re going to pay for that by socking our more responsible, more credit-worthy and “documented American” customers with higher fees to offset the losses we’ll incur in helping our illegal alien laborers enjoy at least a little bit of the American dream.”

Seriously, that seems to be BOA’s “business plan,” such as it is, right now.

What’s my problem with that?Well, aside from the fact that the sentiments above should be nauseating and revolting every rational American, their “business plan” is a prescription for long-term disaster. I don't believe that more disciplined, more prosperous and more well-off customers should be gouged to pay for a poorly run bank's losses they took on in giving loans to poor credit risks (a/k/a poor people and illegal aliens). That's NOT Capitalism!

If your’re a current customer of BOA, I feel bad for you and suggest you get your accounts out of that bank post haste, and if you’re an investor, I’d either bail or short BOA – it’s a disaster waiting to happen.


Dan O. said...

I don't understand why their stock hasn't fallen into the basement. Giving out credit cards to "illegal" aliens? I'd have dropped them like a 10-point buck on opening day if I were either a customer or an investor. How is that looking out for the customer?

JMK said...

Dan O., I'm surprised more people aren't outraged over this, as well.

Who pays for the losses such institutions incur in loaning money to poor credit risks?

Yeah, those with better credit....those more responsible, productive people who pay their bills!

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