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?
(Update: A reader says that I’m comparing apples to oranges here. The equivalent of JP Morgan’s $2.2 billion for the first quarter, is really $2.4 billion for Bank of America. So perhaps I should reword the question above: do you—does anyone—believe that Bank of America’s exposure to flawed mortgages is just $200 million more than JP Morgan's?)
Bank of America gives so little information on how it is arriving at these rosy loss calculations that the SEC has started demanding answers.
Read on.
Let me add that in February, the CFO of Wells Fargo suddenly resigned for "personal reasons" and was immediately replaced by CAO Tim Sloan. In a report released in February, Institutional Risk Analytics notes that "The departure of Atkins, we are led to believe, was not merely the result of personal issues, but reflects an ongoing internal dispute within WFC’s executive suite regarding the bank’s disclosure." More from Zerohedge. Click here.
2 comments:
Mama officially dumped Wells Fargo. We refinanced with Quicken Loans, and got a lower interest rate.
Interesting Mr. Kitty. Wells Fargo and other major banks are in serious trouble. My mortgage is not with Wells Fargo but with another big bank involved in the financial crisis which I will not name. But, I can say that I have stocks with Wells (was given to me) and I filled out my shareholder's proxy vote. I voted definite no to the CEO being on the director board and voted yes for an independent investigation into mortgage fraud (which for the first time, this was put on the proxy ballot. SEC pushed for all banks to place this on the ballot for the shareholders to vote on).
Let me add this. In Wells Fargo booklet to the shareholders, there is a section that talks about how much Wells is helping the struggling homeowners. It said and I quote that approximately 94% of the homeowners are current on their mortgage and that the amount of homeowners that are delinquent is very low and the homeowners are about 60 days late.
Couldn't believe that Wells put that BS in their pamphlet. Thought I add that footnote to you.
p.s. Hope Quicken Loans work out for Mama.
p.s.s. Wells' CFO resigned in February claiming personal reasons. Last week, BofA's CFO resigned claiming personal reasons.
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