Mortgage Criticism The Focus Of BofA Shareholders At Annual Meeting
Two years ago, Bank of America's annual meeting was swarming with angry protesters and shareholders looking for someone to blame for the financial crisis. Bank of America has since struggled more than its counterparts to rebound, largely because of its huge mortgage business. Relatively few critics attended Bank of America's annual meeting Wednesday in Charlotte, but those who came had pointed questions for the bank. Bank of America CEO Brian Moynihan's been in charge for a year now. "Cleaning up" is how he frequently describes his efforts over the last 12 months and he used the same tone in kicking off the bank's annual meeting with shareholders. He described the company as having "two stories." "On the one hand we have a franchise that goes out and wins in the market everyday," says Moynihan, reading in clipped tones from a teleprompter. "On the other hand we have a mortgage business which continues to work through the troubles of the past, principally due to the Countrywide acquisition three years ago." Moynihan said Bank of America has lost $17 billion in its mortgage business since that acquisition. About 25 pastors and community advocates protested outside the meeting, calling for Bank of America to improve its foreclosure paperwork and loan modification process. Virginia Reverend Clyde Ellis spoke for them inside. "While Bank of America celebrates its financial successes, I get to deal with the devastation," said Ellis. "I get to deal with the people whose lives have been destroyed. I get to deal with the ones now who want to stay in their homes and are finding it impossible because they can't get the support out of a broken loan modification system." A number of large pension funds from across the nation sponsored a shareholder proposal to require an outside audit of Bank of America's foreclosure practices. The proposal failed, as did other shareholder proposals to limit executive compensation and relocation benefits. Moynihan also deflected questions on the $1.4 billion Bank of America spent defending itself in lawsuits last year, as well as allegations the bank avoided paying taxes. In his introductory remarks to shareholders, Moynihan sounded conciliatory. "We owe you," said Moynihan. "We're building this company to deliver more consistent, predictable returns for you, our owners. In addition, we are rapidly trying to move behind the issues - our legacy issues - from the financial crisis." Bank of America's share price is down 28 percent since last year's annual meeting and it has not restored dividend payments, unlike other big banks. Moynihan promised that would change as soon as regulators sign off on the bank's health. So far, the federal government has rejected Bank of America's request to pay a dividend. In the meantime, Moynihan urged shareholders to focus on the bank's success with its investment and consumer businesses, rather than the losses that continue to mount in Bank of America's mortgage division.