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[Music] bank of america hasn't been incredibly well liked in fact i think we can go as far as to say that they've been one of the most hated companies out there do you know all these lists that have been put out about the worst or most hated companies well bank of america tends to show up on them i always mention a particular one on this series because i think it's a great reflection of the public's opinion the consumerists used to have this tournament each year where people voted to determine the worst company in america well bank of america never actually won but they were the runner-up in 2011 2012 and 2013 losing to bp and then electronic arts the following two years essentially making them the second worst company in america for three years straight which is pretty bad so my goal today is to try to provide some reason behind all of this hatred to be clear this isn't about my own personal opinions nor am i trying to persuade your opinions in any way i've simply noticed that this company is generally disliked and i want to talk about why there are actually countless potential reasons so i've isolated some of the bigger ones and placed them into five main categories first off would probably be the most direct and obvious reason to the millions of people that have personally dealt with bank of america over the years the customer satisfaction this right here relates to the extra fees or the wait times or whatever makes you unhappy with your bank it's hard to prove things like this but we can look toward the american customer satisfaction index based on customer surveys they assign a benchmark to each industry and then rate the companies in relation to it bank of america has never exceeded that benchmark and in fact about half of that time they were the absolute lowest rated among all major banks just looking at these numbers i'm guessing that there are plenty of people watching this that have had some negative experiences as a customer of bank of america i don't want to spend this time talking about specific cases but for anyone who has a good story that applies here i encourage you to leave it in the comments so we can read about it for my next reason i'm going to keep it simple and say that people don't like bank of america because they are big some would say too big to fail which i'll be talking about later it's no secret that people tend to dislike larger companies especially larger banks and bank of america for decades has been one of the largest currently the second largest in the us when you rank them by total assets and how they got to that size is important here so i want to use this as an excuse to talk about the history of bank of america while highlighting some of the ways that they were able to grow to over 2 trillion dollars in total assets the company goes all the way back to 1904 with a 33 year old son of italian immigrants named ap giannini see his father-in-law was pretty wealthy he owned a portion of a small bank in san francisco and when he died giannini was placed into a director position at that bank now at that time the standard for banking was to play it safe by providing loans and other banking services to the larger businesses and the wealthier individuals and pretty much ignoring the people with less money giannini felt that this was foolish because there was a large population of immigrants and farmers that could benefit from their services and urged the rest of the board to expand their client base when they refused to do that he took the idea that he believed in raised a hundred and fifty thousand dollars from investors and opened his own bank directly across the street from that other one it was initially called bank of italy specializing in loans to the less wealthy italian immigrant population and many others that were refused service from those other banks two years later san francisco was hit by a massive earthquake destroying almost every business in the area including the bank of italy luckily he was able to rescue 80 000 in cash from it and quickly used that money to set up a stand where he would make agreements to loan it out so during a time when the city needed money to rebuild he was among the only ones that was able to provide it to them three years later he started expanding into new areas by acquiring struggling banks around california and turning them into new branches of his bank in the 1920s he started opening them in other states nearby and the name of the locations were changed to bank of america it all continued and by the time janine died it was the largest bank in the country with over 500 branches and 5 billion dollars in total assets some of the more notable things that they've done over the years in 1932 during the great depression when no one else would fund it bank of america provided the money that allowed the construction of the golden gate bridge later in that decade disney found much needed funding from bank of america they were the ones who provided the money to make all of these classic films including their first one snow white and the seven dwarfs followed by dumbo to bambi pinocchio and many others and in addition to all of that they loaned disney the money that allowed them to construct disneyland and disney world another thing worth mentioning is in 1958 they introduced bank americard i have another video that talks all about this but it was essentially the first modern day credit card that changed its name to visa in the 1970s so just to recap here without bank of america we may not have the golden gate bridge disney or even credit cards in the way that we have them today jumping ahead to the 1990s is when they really started growing out of control through a series of mergers and acquisitions in 1998 they merged with nation's bank in an almost 50 billion deal that technically meant nation's bank was acquiring bank of america they just chose to use the name bank of america for the combined company and created the first ever bank that reached from one us coast to the other and it sparked a lot of major changes their headquarters moved from san francisco to charlotte and that's when they adopted that famous flag logo that they've been using ever since in 2003 they bought fleet boston financial corporation and another deal valued at almost 50 billion dollars that was a major bank centered around new england that had 1500 branches in 2005 they bought the credit card issuer mbna corporation for about 35 billion dollars bank of america was already the third largest credit card company and that acquisition pushed them into first place in 2007 they bought lasalle bank for over 20 billion dollars giving them a major presence in the chicago markets then in 2008 they bought the world's largest mortgage lender countrywide financial for about four billion dollars and the following year they bought investment bank merrill lynch in a deal initially valued again around 50 billion dollars those last two acquisitions lead me to my next reason behind the hatred which i'm just going to call the recession see countrywide financial was deeply involved in originating subprime mortgages if someone didn't qualify for a regular mortgage they would instead get a subprime mortgage at a higher rate all of this is at the center of the housing crisis basically they were giving out all of these mortgages that people could not afford and by 2007 2008 when the housing bubble burst and everyone was defaulting on these mortgages it was bad for countrywide and the economy in general i do have a video about lehman brothers that talks more about this crisis but that's the main idea i can confidently say that buying this company was not good for bank of america as far as their reputation or financially because it put them at the center of so many penalties and lawsuits just some of the bigger ones in 2011 they paid an 8.5 billion dollar settlement to investors who bought securities backed by their mortgages that they claim were misrepresented to be more stable and more valuable than they actually were then in 2013 there was a 10 billion dollar settlement with fannie mae because countrywide sold them a bunch of these faulty mortgages in 2014 there was a 16.65 billion dollar settlement with the justice department related to all of this that was actually the largest civil settlement with any single firm in american history and by the way i should mention 2008's winner for the worst company in america was countrywide financial and as far as the investment bank merrill lynch that one brought criticism as well from the public and from their own stockholders those stockholders voted to approve the acquisition but then they claimed that they were misled as far as the losses that merrill lynch was sustaining and the bonuses that were being paid to the executives in 2009 the sec charged the bank of america a 33 million dollar penalty because right before the deal closed merrill lynch paid their executives 3.6 billion dollars in bonuses without informing the voting investors and in 2012 there was a 2.4 billion dollar settlement paid to those investors on top of all of that this whole deal looked especially bad to the public because it was right when they were receiving money from the us government as part of their troubled asset relief program so all around the same time period they were receiving 45 billion from the government while spending billions of dollars on a risky investment and paying executives billions of dollars in bonuses ken lewis the ceo of bank of america at the time stepped down from his position just months later almost certainly due to the backlash from all of this i realize that this entire subject it's complex and political but we can understand how many people would have a negative perception of bank of america following the recession my next reason behind all of this hatred would be their connection to some infamous accounting scandals now this could be said about other banks as well but bank of america was involved in two of the biggest all-time accounting scandals in 2004 they paid a 69 million dollar settlement to enron shareholders who sued them for their role as an underwriter in their accounting fraud the lawsuit claimed that they actively engaged and participated in the fraudulent scheme then in 2005 they paid a 460 million dollar settlement to the worldcom shareholders who had a very similar claim any involvement in the world common enron scandals is not seen favorably by the public for my last reason i hate to say it but discrimination it's sad to see it for obvious reasons but especially because the company was practically founded on providing services to minorities even as late as the 1960s they were the first major employer in california to sign a statement of racial equality and hiring again it's shocking how many lawsuits and penalties that they've been involved in here some of the more notable ones in 2011 the justice department fined bank of america 335 million dollars because countrywide had been discriminatory in their lending practices they're found to be giving african-american and hispanic borrowers higher mortgage rates than the white people who came in with similar qualifications in 2013 there was a 160 million dollar settlement related to merrill lynch that one had to do with their hiring practices and corporate culture involving african americans over the years and similarly the following month the department of labor forced bank of america to pay over 2 million dollars for unfairly not hiring african americans into entry-level jobs again those are just a few cases you could find many other examples of potential discrimination over at bank of america so that's my list they are a large bank with low customer service ratings that's been heavily involved in 2008's economic recession that has been connected to some of the biggest accounting scandals and has had multiple accusations of discrimination it's not a complete list but i think that should be enough to explain why bank of america is so hated let me know in the comments what is your opinion of bank of america if you happen to be one of the many people that doesn't like them is it for one of the reasons that i outlined her for something completely different if you are a customer of bank of america i'm curious how that's been do they deserve to be so low on the customer satisfaction index or have you had a different experience and any other thoughts you have about bank of america neither good or bad leave them in the comments i'd like to hear what you have to say thank you for watching [Music] you