In 1904, Amadeo Giannini founded the Bank of Italy in San Francisco to provide personal as well as professional services to those such as recent immigrants who had been denied service from other banks. When the 1906 earthquake struck, Giannini removed all deposits from the bank building and away from the fires. Because San Francisco’s banks were in smoldering ruins and unable to open their vaults, Giannini used the rescued funds to start lending within a few days of the disaster. Working behind a makeshift desk of a few planks over two barrels, he loaned money to anyone who was willing to rebuild. Later in life, he took great pride in the fact that all of these loans were repaid in full.
In 1922, he stablished Bank of America and Italy in Italy by buying Banca dell’Italia Meridionale, itself only recently established in 1918. Then on March 7, 1927, Giannini consolidated his Bank of Italy (101 branches) with the newly formed Liberty Bank of America (175 branches). The result was the Bank of Italy National Trust & Savings Association with capital of $30,000,000, and resources of $115,000,000. In 1928, A. P. Giannini merged with Bank of America, Los Angeles and consolidated it with his other bank holdings to create what would become the largest banking institution in the country. He renamed his Bank of Italy November 3, 1930, calling it Bank of America. The merger was completed in early 1929 and took the name Bank of America.
Usually, when there is rapid and substantial business growth, personal service suffers. Not so with Bank of America. Soon after Pearl Harbor when Word War II was underway, thousands of Japanese-American citizens including Nisei (second generation) were rounded up in the Bay Area and relocated to detention camps. Gianninni made certain that BOA would fully protect the assets of those who authorized it even if they were not BOA customers. Years later, after they were released and returned to the Bay Area, all of their assets (including residences and businesses) were returned to them.
That was then. This is now. I am a BOA customer who in 1991, opened an account at a local branch of NCNB which became NationsBank (1991) and then Bank of America (1998). BOA recently announced the latest of its new fees ($5 a month per debit card account) after a number of previous initiatives that clearly indicate that it has lost its way from the values personified by Amadeo Giannini. Incredibly inept management probably explains the bank’s well-publicized problems with sub-prime lending, illegal foreclosures, and usurious (albeit it technically legal) fees on unpaid credit card balances, late payments, insufficient funds, electronic funds transfers, and probably several “stealth” fees hidden within the small-print documentation. Its victims include thousands of its own employees who will lose their jobs because of greed and/or incompetence at the senior-executive level. To be fair, BOA is by no means an industry exception and that upsets me even more.
For years, they offered pre-approved credit cards and then frequently increased the line of credit, enclosing blank checks with monthly payments. They urged people with little (if any) collateral to obtain mortgages on homes they could not afford. Over time, banks found new and even more lucrative ways to engulf their customers in debt. Now they view each customer as a piñata, hoping to survive their own debt.
Where is Amadeo Giannini when we need him most?