CHARLOTTE, N.C. The first protest target at the Democratic National Convention won’t be President Barack Obama, health care reform, or the party’s stances on gay marriage or abortion.
It will be Bank of America.
A group calling itself the Coalition to March on Wall Street South is scheduled to host a march in Charlotte on Sunday, stopping first at the bank’s corporate headquarters before winding its way past Bank of America Stadium.
That banks should be a primary protest target at a political event is a reflection of the public anger still simmering toward Wall Street, even four years after the $700 billion federal bank bailout and months after Occupy encampments have all but disbanded.
“Despite the fact that the bailouts were four years ago, and there’s been officially declared an end to the recession, the everyday reality for people is a much different story,” said Ben Carroll, an organizer of the coalition. “People still see and feel in their everyday lives that the banks are responsible for so many injustices in their communities.”
It’s not just the view of protest groups.
Americans reported record-low confidence in U.S. banks this year in Gallup’s annual report, with only 21 percent saying they had confidence in banks and 35 percent saying they had very little or no confidence.
And as corporate and bank profits continue to increase while unemployment and foreclosure rates are still high, people of all stripes are being rubbed the wrong way.
“On both sides of the political aisle, there’s a feeling that the game is somehow rigged, that there’s been an injustice of some kind,” said Brian Gunia, a professor at Johns Hopkins Carey Business School.
“They haven’t said, ‘We messed up, and here’s why and we’re sorry,’ or there hasn’t been a sufficient punishment of them in the eyes of the public.”
Just when anger over proposed debit-card fees at Bank of America and several other banks was beginning to subside, the banking industry found itself hammered by a new series of negative headlines.
• Citigroup shareholders rejected CEO Vikram Pandit’s $15 million pay package at the bank’s annual meeting this spring, the first time a major bank’s shareholders had done so in a symbolic “say on pay” vote.
JPMorgan Chase & Co. revealed it lost billions on an oversized trading position that straddled the line between hedging and betting, using the pot of money making up the difference between the federally insured deposits the bank brings in and the money it lends out. Depositors did not actually lose money, but shareholders did. CEO Jamie Dimon initially called discussion about it a “tempest in a teapot,” but ended up on an apology tour that culminated in congressional hearings.
• Barclays PLC agreed to pay $453 million to settle allegations that the bank manipulated a key interest rate to demonstrate false confidence in banks and make money through trading. CEO Bob Diamond was forced to resign, and executives were made to answer to the British Parliament.
• Wells Fargo agreed to pay $175 million to resolve claims that its mortgage brokers discriminated against black and Hispanic borrowers, pushing them into higher-cost loans.
• News reports said that no criminal charges would be filed following investigations into the vanishing of $1 billion in customer money during the collapse of trading firm MF Global.
• And most recently, Standard Chartered PLC said it would pay $340 million to a New York state regulator to settle charges that the bank laundered money for the Iranian government.
“I am beginning to understand why Americans hate Wall Street so much,” bank analyst and SNL Financial contributing editor Nancy Bush wrote on her blog. Legal action against bad behavior has been “both a day late and a dollar short,” she wrote, and the penalties have done nothing to prevent wrongdoing from recurring.
“Do we just have to sack the whole damn model and start over again?”
At the same time, the mortgage crisis symbolized by companies like Countrywide Financial Corp., which Bank of America bought in 2008, continues to weigh on homeowners around the country.
Home prices remain depressed, meaning millions of people owe more on their houses than they are worth. The government’s refinancing programs have helped fewer people than hoped.
And a report last week showed that relief promised as part of a $25 billion settlement with five of the country’s largest mortgage servicers has been slow to trickle out. Bank of America, for one, had yet to reduce a dollar of principal or modify a single mortgage under the terms of the settlement.
Bank of America CEO Brian Moynihan faced dozens of such complaints in Charlotte during the bank’s annual meeting in May, which drew several hundred protesters in the streets and activists inside the meeting.
Moynihan told the crowd that he listens carefully to their concerns. He said the bank has 50,000 employees working to help struggling homeowners, and said the bank has modified 1 million mortgages since 2008.
Moynihan also said they’ve been working to clean up problems the bank inherited when it bought Countrywide.
Sensing the political winds, banks and their lobbyists will be taking low profiles during the convention.
Bank of America and Wells Fargo, which has its East Coast headquarters in Charlotte after acquiring Wachovia in 2008, are quietly co-sponsoring a few events, but won’t have a significant presence.
Bank of America said its executives have been working with local law enforcement and other officials on a security plan, but did not offer details. The bank doesn’t comment on individual protests.
Wells Fargo says it’s focused on keeping everyone safe.
“We are focused on being open for our customers, as well as keeping them, our team members and properties safe,” Wells Fargo spokesman Josh Dunn said in an email. “But Wells Fargo will always respect the rights of Americans to peacefully assemble, and we welcome open and collaborative dialog with our stakeholders.”
No end in sight
The animosity is unlikely to subside anytime soon, and there’s only so much the banks can do to help themselves.
It’s not helping that people have been unable to see whether anything is really changing inside the banks, said Gunia, the Johns Hopkins business school professor.
Executives also have been reluctant to take responsibility for any wrongdoing, usually for legal reasons.
“People open up a lot more when you act like you’re being honest and assuming responsibility,” Gunia said.
But the bigger issue is the economy as a whole. Families are still struggling, and banks have become the predominant target of that anger and frustration, he said.
“As the economy gets better, the anger will subside.”
Dunn: 704-358-5235 Twitter: @andrew_dunn
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