Thursday, March 26, 2009

Who (besides you) is mad at bankers?

We'd like to officially welcome bankers into the Fraternity of Despised Professionals.

Our motto: "It's not you. It's the other (insert your profession here) they hate."

It's been a rough stretch for bankers, who've slid past attorneys and, perhaps, journalists in public scorn. These money experts have, in the past year, been battered for extravagant bonuses, plus loose lending, plus packaging that loose lending into profitable but ultimately ruinous securities.

This week, they were thrashed on Capitol Hill for taking bailout money, then locking the door on customers who come for loans or help with a late credit card payment.

Our perception of bankers once teetered between George Bailey and Milburn Drysdale, between "pillars of the community" and "greedy moneymaker." Now it's so bad that even Barney Frank (unpopular D-Mass.) gets to slap them around publicly.

“People really hate you," Frank said to banking execs last November, "and they’re starting to hate us because we’re hanging out with you. And you have to help us deal with that.”

Who's the angriest at bankers? It might be other bankers.

Says Squeeze reader Rebecca, a Bank of America employee: "To be honest, the number of bankers making the kinds of (bonuses) you hear about is so small … we hate them, too!"

Rebecca says there's a culture clash within banks between the aggressive trading floor types and those who analyze the risk of those trades. "Most bankers by nature are cautious, rule-bound folks," she said. "Contrary to popular belief, BofA has always been pretty diligent about the kinds of investments we make, and has always used sound business principles in my opinion. We just got burned by the (Merrill Lynch) deal."

And those bonuses? "I know my bonus was a third of what was promised," she says, "and it was very small to begin with … Most rank-and-file folks never get raises, and the little tiny bonus we get is used to pay expenses, not buy airplanes."

Most of us in Charlotte know this. We have bankers in our neighborhoods and bankers in our grocery aisles. They drive cars like our cars. They're mediocre at golf like we are.

And they, like us, benefited from the banks being here. Without BofA and Wachovia, Charlotte doesn't get the commerce that flowed through our city, the people that came for a piece of it, or perhaps the Panthers, the splashy downtown, the real estate boom that followed.

Now one of those banks is gone, and the other is wounded, as is our civic pride. More job cuts are coming, perhaps significant, to BofA and Wells Fargo. Some will be tempted to say the bankers had it coming, and perhaps Charlotte, too.

Here's what Rebecca says:

"Most of the people I work with are 'company men' who truly have a sense of dedication to the bank. So when they see the bank being trashed, and folks being laid off to pay for the excesses of a few, they get just as mad as non-bankers.

"We feel like they sullied the family name, so to speak, and we are all paying for it."


Anonymous said...

The bankers that most of us deal with are in the same boat as we are. It's their executives cutting the rug out from under us. As in, displacing tech jobs to foreign soils, purchasing "soft" banks, and greed. Feel sorry for our banking contacts, put your anger on the management that forced their hands.

Anonymous said...

Maybe upper level management, yes, the others that work there that have no control? No.

I am more angry at the mortgage brokers that put together deals that they knew their clients couldn't afford...or were to naive to understand the implications.

Anonymous said...

Thanks Rebecca, you have just done more to put this whole thing in a clear focused proper perspective, than any writer in the nation. You just gave bankers a heart for the public to see. I wish you well and suggest that you be promoted to head of public relations, as you do it so very well.

anne said...

Nice article...I also work in finance and believe that since people never understood finance to begin, they feel the entire industry is to blame for our current crisis. I hope people realize it is just a small percentage of employees that were irresponsible, and some of us really believe in our fiduciary duty to investors.

Anonymous said...

Before moving to Charlotte I worked for Citigroup, first in their credit card collection group and then in their brokerage group (not Smith Barney, but Citi brand brokerage).

When I moved to Charlotte I decided to NOT work for a bank because of my experiences with Citi.

I went to a straight privately owned brokerage business.

My experience at Citi (about 3 years ago) taught me just how arrogant and reckless banks could be.

I can remember managers bragging that Citibank could not fail no matter how badly they screwed up because they were just so huge.

They would say that if Citibank failed, then the US would follow right behind it.

In retrospect, they almost seemed proud of this. And these weren't high-level execs, but lower to mid-level managers (Citi lifers) who expressed these feelings.

I could only imagine how arrogant the top guys were based on the annual company meetings we had where they sent videos thru the company.

They really thought highly of themselves and how they helped loosen a lot of regulation regarding credit cards and such.

Chuck Prince was top dog at that time and I could tell he was a loser just by listening to him talk.

I really don't think he knew much about banking/finance. I can't imagine that he could actually figure out what risk was involved in a credit default swap for example. He seemed more like a "people" person.

Citi bragged about how they helped make credit available to those who couldn't get it before, all the while glossing over how they were sticking it to the poor with their fees and high interest rates.

Altogether, the arrogance I witnessed at all levels of management (even toward employees) amazed me.

They seemed to embody all the worst of business practices that the b-school cases warned against.

After my 2 year stint at Citi, I never gave another bank a chance, thinking they would probably all be stupid bureaucrats at best
(and arrogant manipulators at worst).

I think the last year has only strengthened my feelings about banks, bankers, and banking as a profession.

Whatever you do, don't believe a word the top guys tell you. They are professionals at covering their rears. It is the only way they could have risen to the top in banking.

The honest wouldn't have survived.

Anonymous said...

I worked at Bank of America for almost nine years until about two years ago. I received moderate bonuses I didn't feel I deserved. I always got annual raises, as did every Meets/Meets or Exceeds/Exceeds associate I worked with. I "earned" extra bonus points for doing my job and was allowed to trade them in for expensive TVs, jewelry, luggage and household items. Every Monday morning I listened to a drunk-on-Kool-aid exec talk about finding the "sweet spot" in sub-prime lending. I wonder if he ever found it. I left the bank and started my own company where I make the rules.

Anonymous said...

Maybe not all bank employees get the biggest rewards, but I have witnessed many different people I know working at non-management levels for various Charlotte banks who have had more perks than other working people I know. For instance, I know many who have taken elaborate trips at the bank's expense, including ski trips out west and other expensive outdoor excursions. I have also heard bank employees brag that they received substantial raises (like $10K/yr) and bonuses (in the thousands of dollars) for no good reason. I am college-educated and have worked my tail off since graduating from a very good university. But I have never received a bonus of any kind and have never been on any trips that were not all work. I have also heard many times that the atmosphere at Bank of America for employees is cutthroat and that they are notorious for getting rid of employees before the employees retire to prevent having to pay retirement benefits that they had promised employees. GREED - GREED - GREED, alive and well. Apparently, too many people who work so closely to huge sums of money cannot resist the temptation of thievery. I HATE BANKS!!

Anonymous said...

all I know is with a credit score near 800, houshold income of 6 figures+ and NEVER once in three years being late, never once being over the limit (kept below 15% usage of available limit) my interest rate was slowly jacked up to 19.6%. They gave no explanation other than asking if I actually read what I signed.

Thanks BofA lending. Thanks for nothing. Hope you enjoy YOUR handout.

RW said...

I'm amazed at the numbers of people that feed off of stock investments. I have a retirement adviser that I don't knowingly make a cash payment to.But its obvious that he's got a kick-back off of the process due to life-style, and look at all the other fat-cats along the way too. Its really pitiful, and to think that GW Bush wanted to invest social security in this same manner, making these same leeches richer, and I tend GOP.

Anonymous said...

Why should what another person makes concern any of us??? Grow up. Theres too much concern and ARROGANCE when someone spends time discussing what Johnny or anyone else should or shouldnt be paid...from our Congressional leaders and even from our new President! I would prefer these politicians focus on balancing the budget and cutting wasteful spending and earmarks. However, its always easier to criticize someone elses back yard. Lo the hypocracy.

Anonymous said...

Last year after a major screw-up by Citi with servicing my student loans I commented to customer service that "If I owned Citi stock I would sell you are so screwed up I should short Citi stock" ...should have listened to my own advice and made a ton of money !

Anonymous said...

Seems most in here actually get it. With 200,000 employees prior to the most recent CW and ML acquisitions, this is a huge company. To insinuate that the whole bank is full of crooks is just dumb. There are probably less than a dozen people that should be held accountable for some of the things that have happened. And as for investment bankers making so much money - it's all relative. No one complained when all of their clients were making so much money. No Charlotteans were complaining back when they were selling their homes for high prices creating an incredible amount of equity. Everyone took risk. Bankers took risk to offer certain products to certain customers. Certain customers took risk in buying certain properties and investments. I could say the people are to blame for being too ignorant and buying things they couldn't afford. You could also say banks are to blame for even offering it to them. And you could also say the government is to blame because in many cases they forced banks to lend. And now people are mad because banks are loaning as much. Why do the same thing that got us into this mess in the first place. It has to equalize at some point, and the banks are simply no longer going to let people borrow money that can't afford it. It doesn't matter if you have a good credit score or income. If you owe more on an existing obligation than its worth, that is a problem. I am not in banking, but feel I understand the industry quite well. I have many friends and family in banking, and I say keep up the good work. We need you - and we know deep down in our hearts that the few bad apples don't mean that you're anything but hardworking people. The bank's stock will recover, and we'll all look back at this as a lesson of excessive spending. Americans need to realize that just because you can get credit doesn't mean you should.

Anonymous said...

There has been excessive spending. There has also been excessive risk-taking by financiers and breach of fiduciary obligations. Please don't even begin to try and solely blame poor schmoes who took out mortgages they could never afford. There is plenty of blame to go around. We have been building a culture of the obscene worship of money and the deligitimizing of government and regulations for 30 years. Like every bubble that preceded it (1870s, 1890s, 1920-30s), it has come crashing down around our ears with no one willing to say I screwed up.

Anonymous said...

"The bank's stock will recover, and we'll all look back at this as a lesson of excessive spending." How is the bank's stock going to recover if everything else you say is true? If they can't lend to people who shouldn't be borrowing, how are they going to make money?

Anonymous said...

Waaaaaaaah! Waaaaaaah! The only bankers that do any real work are the tellers. Get a real job providing a real service or product. Manipulating money to turn it into more money is a magic trick not a business model. The world would be better off if we had to pay cash for everything. No loans, no interest on savings. Use banks as a place to store currency and nothing else. It's obvious that's all they can handle.

Anonymous said...

Most bankers are good until they become an executive- this were the problem starts. At the executive level they get bigger bonuses whether they did good or not.

I'm a manager and when I got my big bonus, I actually gave half of it to my employees. I realize that could not have received it without their hard work. Not only that, I fight my hardest to give them their annaul increase they deserve. It really is not fair that a company pay its executive level management 4x or greater than their employees.

Anonymous said...

in reply to "The honest wouldn't have survived." from above. There are many honest ones that have survived. Some will come out of this unfortunate mess that we are all enduring now stronger than they entered. It's not because they used any sort of magic, it is simply due to their realization that while something is 'legal' that doesn't make it 'right'. One of these banks has a building downtown. It's not the biggest or the flashiest building, and it's likewise not the biggest of the flashiest bank. But anyone who wants to put their money into something big and flashy may as well head to Vegas or Atlantic City.

There are good banks out there. I've worked for one for 10+ years in Charlotte and am very proud to be associated with the organization. I'm not going to divulge the name becaues I'm not in public relations, but if you've been paying attention to this entire mess you may already know who I am talking about.

This is not an industry-wide problem. This is, as many others have already noted, a lack of diligence in adhering to fiduciary responsibility to the stock holders. Short term gains are not equivelant to long term prosperity.

Anonymous said...

Let's not overlook the insurance industry in this conversation.
Remember, most of the trading that proved (and somewhat still does) was backed securities- mortgage or otherwise.

To say bankers are hated is a gross generalization. What I see as the 'overall' problem is the corporate culture. There are hundreds of thousands of corporate robots out there - wired to do EXACTLY the same process over and over again. Corporate Mgt doesn't want them to think critically - for that might throw a cog in the machine.

I've seen the corporate training sessions first hand - it's not much more than hypnotist session set to music with a "go-team, go" theme. Very embarrassing really.

Until large corporations realize their companies are organic - like trees or grass - and not mechanical - like an engine or transmission - we'll continue to have the same BS filter through the same antiquated BS system of soldiers.

We need these corporations - but these corporations need some serious mirror time to figure out what the heck it is they're trying to achieve.

Anonymous said...

When I commented that "the honest wouldn't have survived" I was referring to Citi culture at that time (about 3 years ago) under Chuck Prince.

That man just struck me as out of touch and perhaps a bit of a con man.

He seemed a bit more touchy-feely than I liked and probably more at home looking at party seating-charts than financial charts.

I don't know how the culture has changed since then, but current events convince me that Citi was not the only bank with problems.

It just put me off banks in general. I think credit unions seem to be a little better.

The only bank I've heard of that sounds like I might like to work for is BB&T (at least under their old CEO).

In Charlotte I joined a private brokerage firm which I feel is a much more honest place overall (and actually cares about its clients and employees).

I expect the honest, solid companies to survive and do better in the future, but I'm equally sure that bloated behemoths like Citi will also survive.

It's funny to me how some of these banks are getting TARPlash and trying to figure a way out of the mess they're in now that government has swung in the opposite direction in "regulating" them.

It couldn't have happened to a more deserving bunch.

Anonymous said...

I agree about the corporate culture.

Citi had gotten to the point that they believed they could do no wrong and really did not respond well to ANY criticism.

They thought they had everything figured out and only had to cut and paste and enforce compliance.

That's one reason I think India became so crucial to their processes.

Management was extremely arrogant and thought their job was simply to command and control.

My experience in a private company was different until, perhaps, recently.

I have noticed that in the last year or so that the company culture is changing as the company has grown and hired more managers from failing competitors.

The problem is that a lot of these "reject" managers are being hired in some influential positions and are starting to wreck the company culture.

(Trickle-down wreckonomics?)

A few months back, I had one of the "rejects" come sit by me for a few minutes to tell me how to lie to a client without REALLY lying to them, just don't tell them all the facts unless they ask.

He had noticed that I tended to side with the client when they were correct and didn't twist the truth enough to cover corporate rear.

It was the first time this had been brought to my attention in this company.

And, in fact, the company creed specifically said that we were supposed to side with our clients if the company was at fault.

One of the things I liked about the company was that they really did put their clients first.

I quickly sought a transfer to a new group with an old-line manager.

But, as the competition downsizes, the rot is spreading.

Anonymous said...

Why is it always someone else's fault and that there is no longer personal responsibility? The Barney Franks of this world pushed the banks to make sub prime mortgages. Did some bankers take advantage of this and go overboard? I'm sure some did, but not the norm. The real problem lies with the individuals who took out these mortgages and with Congress who, after being warned repeatedly that this would happen, still encouraged issuing subprime mortgages. In fact, Freddy Mac and Fannie May are still doing it under the guise of FHA.
How can the people who took out mortgages that they can't afford claim themselves as victims? Common sense should tell you what you can and can't afford. Maybe we should spend the money on common sense education instead of bail outs.

Anonymous said...

I used to work for BoA in fixed income before moving to NYC for more money, and to be honest, with no disrespect to the great people I used to worked with, I always got the sense that BoA never really understood the crazy structured bond crap it was getting involved with. It just threw capital at the problem thinking they would simply dominate because of it's huge deposit base. The big, universal bank model is irrevocably broken. Size is the enemy of excellence.

Anonymous said...

Not just bankers! I'm mad at lenders in general! My family suffered a tragic loss, I lost pay from my job and was late on two car payment and they want to charge it off! They asked me to call them by end of business day this week by 8pm. I did, 3 times before 7:30pm after work. They then told me it was charged off at 4pm??!!! Why on earth wasn't I told call before 5pm? I would have called back but it was too late! I just can't believe a large firm with bailout money would be so harsh to a good customer with ONE bad situation. This is a car that was over $20,000 brand new 5 years ago with only less than $2,000 left to pay. I had zero interest for 5 years on this vehicle. Before you all blame customers, consider the situation. These employees of this large firm were the absolute rudest, catty, most unprofessional people I've ever encountered. Maybe they should have just told me to kill myself. That would have been easier and less stressful than to have to deal with them.

Anonymous said...

GMAC is worse than any bank!! They have been great except for the last 3 months since their bail out money was made public. Now they have the WORSE customer service in the WORLD. Steer clear of them! Trust me. I've been with them since 2003 and had perfect credit. Now, they don't care about job loss, they don't care about death. All they care about is making your life pure hell. I hate them.

Anonymous said...

I hope you will all read the expose of Rahm Emmanuel in today's Chicago Tribune. Those around Obama had a big hand in the mess the banks are in right now. They are using the banks as a scape goat. In fact, they are trying to get their hands on banks and businesses this very minute. Why? So they have more control to spoil everything! Multiply that bad banker times 100 and you have our administration. Please read the article.

Anonymous said...

If one wants to sell my house or sell me a house, or sell me insurance, he/she must have a license. Why don't those who handle my money have to be licensed? My Dad had money in many banks in Charlotte upon his death. Thankfully, I had educated myself as to the legal process for retrieving this money. It was amazing how I had to "walk" through the process with several bank employees. Once, when one banker tried to charge a penalty for early withdrawal, I had to explain to them what a "pay on death" was. When I pointed this out on the reverse side of a CD, the banker said, "Oh, I don't have time to read all that stuff".

Anonymous said...

The 1:13pm post hit the nail on the head. No sympathy for people who took on loans they knew they couldn't afford. And if they don't know how much they can afford, they shouldn't be investing in something such as real estate. Banks obviously got their hand stuck in the cookie jar, but all investors enjoyed the rewards of the risks taken for many years. While there was risk of it blowing up, so is the risk of driving 70mph even if that's the speed limit. Sure the probability of something happening goes up the faster you go, but the severity of impact of any accident going 45 or more would be critical. So what do we do? Should we all blame automakers for making cars that can go that fast? Or the government for not requiring governors on automobiles? They were just abiding by the speed limit, after all! At some point human beings need to use their head, listen to advice they receive about what they should and should not stretch everything in their life out in excess.

Anonymous said...

All 7000 Wall St corporations are set up the same exact way with the elite at the top making billions while the mid to lower levels settle for normal wages. Their bonuses come usually from stock options that come from stockholders who vote them in annually not from earnings.

This is a ludicris argument. Charlotte is a banking city and the 2nd biggest in the world until recently due to the economic crisis and mortgage meltdown of trillions mainly due to lending to unqualifed liars who play dumb now that they didnt understand their loan. What a crock.

Bitch all you want but this is the way capitalism works and there will be no more derivatives so all those who were foreclosed on the American dream will be in the cold as far as home ownership.

Banks are essential to a modern society otherwise those who hate the setup could go to a 3rd world cesspool like Africa and live like rats in mud huts with no running water no electricity no paved roads or modern medical or shopping etc.

They do need to clean up those top 1% making all these millions but what about pro athletes making millions? Shouldnt they be taking a cut?

Charlotte is/was a big banking town but the way things are headed it may be back to the racing and trucking capital of America or maybe even build some cotten mills again.

Some people predict America slipping to 3rd world status although its big cities have been 3rd world for ages. Then you wouldnt have to worry about banks as everything you buy would have to be paid with cash or maybe crops cattle and sheep as in the ancient times and you may be walking everywhere you go with sandals and wearing a Belushi toga.

Anonymous said...

Well, I've got some backhanded treatment from Citi after I resigned that really chapped me.

My credit score is in the low 800's. Has been for years. My credit is pretty darned good overall.

But, when I left Citi to move to Charlotte, they claim that they overpaid me on my last check.

OK, no biggie, just let me know I was paid some extra unearned time and I'll return it.


They couldn't do the reasonable thing.

Instead, they invoked some oddball
clause in my employment contract that let them TAKE OUT A LOAN from their Citi Financial branch (basically a sub-prime lending organization) to pay themselves back.

And then let CitiFinancial collect the "debt".

OK, as if that weren't bad enough...

They did not INFORM ME that this was done or that I owed CitiFinancial ANYTHING.

Remember now, 800+ credit score here, no history of ever paying anything late. I am almost obsessive about it.

One day, I got a phone call saying that I was 3 months late on a payment from CitiFinancial.

I told them that I did not and never would do business with CitiFinancial (since I knew about Citi), so could not owe them a thing.

They told me that the loan had been authorized by Citi and looked like it had something to do with my pay.

What a crock of BS.

Since I knew how Citi worked, I paid them immediately with a check over the phone for the full amount due.

The best thing to do with these bloodsuckers is pay them then deal with them later if needed, or they will try to ruin you.

Next month, I got another call saying that I hadn't paid off and they were going to refer me to a collection agency and hurt my darned near perfect 800 credit score.

Total amount due:


They were threatening to ruin my credit for a penny.

I got a manager on the line immediately to get it resolved.


Anonymous said...

Bless those of you who actually made the deliniation between the banking execs making exorbitant bonuses and the "front line" bank employees who are in the same boat as everyone else. I'm a bank teller, I make a decent wage (not out of line with average salaries), and I live paycheck to paycheck just like people in many other professions do, as do all of my co-workers.

I find it interesting that, while people are laughing at cartoons about sacrificing bankers and such for the insane bonuses, no one bats an eye at athletes' paychecks.

Anonymous said...

"I know my bonus was a third of what was promised," she says, "and it was very small to begin with … Most rank-and-file folks never get raises, and the little tiny bonus we get is used to pay expenses, not buy airplanes." In all the years I've worked for Bank of America, I have always received a raise, even if it was a small one. I never managed a rank-and-file or any other Band 4 -6 associate who was meeting or exceeding expectations who did not receive one. I also have never been told ahead of time what my bonus figure was going to be, or even that I was definitely getting one, even in the best years. I question the authenticity of Rebecca's statements. People are entitled to form their own opinions of any company, but let them be based on fact.

Anonymous said...

I am truly made that you would be so stupid as to even post such a comment. it is the news media trying to sell sensationalism that makes me mad. why dont you report about the next tax/fee increase the Meck County is trying to do. why dont you talk about the roads, or traffic, or better yet - just quit publishing your trash and go under. who the heck cares!!!!!!!!!!!!!