Bank of America chief executive Brian Moynihan said banking took a wrong turn leading up to the financial crisis when it lost sight of what should have been its first and foremost focus – giving customers products they actually want and need.
“The danger in banking, and where it got messed up ... is we lost the purpose – which was people said, ‘We’ll just make money,’” Moynihan said during a talk he gave Wednesday night at Christ Church Charlotte.
“It’s always about customers. ... Are you doing things to add value to your customer base, which inherently adds value to society?”
The CEO of the Charlotte-based lender shared those views during the roughly hourlong discussion at the Episcopal church on Providence Road, which invited him to take part in an ongoing speaker series Christ Church Charlotte organizes.
Moynihan, 55, discussed his upbringing as one of eight children in a Catholic family.
His younger brother, Patrick, is a trader-turned-deacon who now heads a Catholic boarding school in Haiti. Moynihan is a former college rugby player who earned a law degree, went into banking and now runs the second-largest U.S. bank by assets.
Christ Church Charlotte Rector Chip Edens asked Moynihan whether his family had conversations about money as he grew up in the town of Marietta, Ohio, where his father worked as a chemist for DuPont.
Moynihan said the family was “comfortable,” even though what his father earned “was never that much when you took it and divided it by all his kids.”
Moynihan, CEO since 2010, was awarded $13 million in total compensation for his performance last year.
The CEO’s comments come about seven years after the start of the financial crisis, which dealt a blow to the reputation of bankers. Moynihan said the bank’s purpose is to help its customers, not “make money for money’s sake.”
Bank of America doesn’t offer certain products, like subprime loans, “because its wrong for customers,” he said.
“I’ve seen ... across 30 years of what it’s done” when consumers who can’t really afford such loans fall behind on payments, he said. “It’s never good.”
Bank of America remains under fire by some of its largest shareholders over the lender’s decision last fall to change its bylaws and make Moynihan chairman without consulting with investors first. In response to the backlash, the bank has scheduled a special meeting for Sept. 22 in Charlotte to hold a binding shareholder vote on the matter.
Moynihan addressed that issue when Edens asked about it.
“We basically are going to ask the shareholders to confirm the board’s flexibility to have a chairman/CEO structure,” he said. “Of the S&P 500, 97 percent of the companies have (that) flexibility,” but that doesn’t mean all of them have a CEO who is also chairman, he said.