Scuba Man and I had a discussion the other day that led to me doing a lot of research that evening. He said he had read a lot in the news regarding Bank of America and how it looks like they’re in trouble. This is where we do most of our banking.
There has been some bad news flying around BoA. Last year, Warren Buffett invested $5 billion in them. Although the BoA CEO said it was just a large investment and it was a strong endorsement of the bank, many analysts opine that it was to shore up their capital.
BoA has had horrendous legal bills, as in the billions. They sold off their European credit card operation and the Canadian card division. They been cutting a few thousand jobs. They also are and have tested the water with new fees to their customers.
Then, Fannie Mae comes to the party. It seems like a he said/she said deal happening. Fannie Mae did not renew its existing loan delivery contract with BoA, severely limiting the types of loans BoA can deliver to FNMA. Fannie said the bank has failed honor their it’s repurchase requests on time.
Bank of America, on the other had, said it would stop selling loans to Fannie Mae because of the disputed differences. I soon expect throwing sand and someone being kicked out of the sandbox and sent home.
It makes me wonder just how good ANY bank is. I’d be all for moving our accounts to our credit union, but that’s something we need to talk about. Although our credit union isn’t close by, there is a shared credit union very close by where we can do any transactions that we would do at our branch. It acts as a branch of our credit union. It is something to consider. I would first have to make sure it has all the features we need.
I’ll keep an eye on the news. I used to think BoA was too big of a bank to fail, but after all that has happened on Wall Street (can you say Lehman?), I’m not sure of anything anymore involving finance. We live in precarious times…