Many of us who have been paying attention to the economic crisis were somewhat amused when Senator Bob Corker proceeded to take the Big Three automakers to task as they appealed to Congress for a bailout late last year. Where was Bob Corker (or any Republican senators, for that matter) when the financial and banking industry came to Washington with its hand out? Was Corker as tough on them as he was on GM?
This is a rhetorical question, of course. Nobody with a passing familiarity with Bob Corker’s career in public office would ever accuse him of trying to tell business what to do (except, of course when it comes to companies who have unions).
Still, perhaps Senator Corker can teach us all a lesson in corporate responsibility. Let’s examine how another one of America’s corporate titans stands up to scrutiny after it extended its hand to receive a welfare check from Uncle Sam. Let’s take a look at Bank of America.
Despite taking $25 billion in taxpayer dollars, Bank of America has not used their bailout funds to increase lending and revitalize the U.S. economy.Instead, BofA has cut credit to consumers and businesses, it has announced plans to lay off 35,000 workers, and has continued to displace families by foreclosing on homes.
We are now getting a picture of what Bank of America’s version of “economic recovery” looks like:
Less lending. A company spokesperson admitted at a November Senate hearing that BofA is “lending less than we were a year ago.” Recent reports indicate that the company has pulled back its consumer lending, raising rates on existing credit card balances and cutting lines of credit even for creditworthy borrowers.
Layoffs. Since 2004, Bank of America has cut more than 34,000 jobs. Now, after receiving its $25 billion in bailout money, it has recently announced plans to eliminate up to 35,000 jobs over the next three years—one of the largest rounds of layoffs in the history of the financial services industry.
Low wages and benefits. At its branches, Bank of America has a record of paying low wages to its tellers. According to a 2008 salary survey by PayScale.com, the median salary of BofA bank tellers was only $23,597. The bank is also letting taxpayers foot the bill for healthcare. In Massachusetts alone, more than 1,800 Bank of America workers received Medicaid at an estimated cost to taxpayers of $2.5 million.
Corporate excess. Major expenditures at BofA included foreign investments, dividends to shareholders, corporate jets, and even $10 million to Washington lobbyists who get to “talk business” with people like Bob Corker. Did I mention that Corker received $5,000 in campaign contributions last year from Bank of America – a year in which he was not even running for re-election?
Displacing homeowners and families. Bank of America is one of the leading banks opposing national legislation that would rewrite U.S. bankruptcy laws and help troubled mortgage borrowers avoid foreclosures.
Looking at Bank of America’s behavior, even Senator Corker should agree that it’s time for them to shape up, just like the Big Three have had to. What should Corker and the rest of us be asking of Bank of America?
First, they must commit to providing affordable healthcare for their employees and their families so that taxpayers aren’t forced to subsidize its payroll costs because workers rely on state-funded healthcare programs.
Bank of America must try and help families hold on to their homes, if for no other reason than to protect their own (and now taxpayers’) investments. They should pledge to support legislation to relieve troubled mortgage owners from having their homes foreclosed.
Just as importantly, Bank of America needs to guarantee whistleblower protections in order to ensure greater accountability. Whistleblowers could have saved taxpayers billions of dollars in the current banking crisis and would have helped protect consumers.
The answer is simple: Bank of America must use its stimulus money to make the economy better and provide healthcare for its 247,000 workers—or they should give the bailout money back.
To find out more about how we can force Bank of America to be more responsible with taxpayer money, visit http://www.seiu.org/change-that-works/bank-of-america/.