The History of Bank of America

Bank of America serves over 57 million customers with 5,900 banking centers and 18,000 ATMs in the U.S. Bank of America began in 1904 as the Bank of Italy in San Francisco by Amadeo Giannini to cater to immigrants who were denied service to other banks. In 1922, it was renamed as Bank of America and Bank of Italy branches. In 1927, Giannini consolidated Bank of Italy branches with Liberty Bank of America which was renamed Bank of Italy National Trust & Savings Association. In 1928, Giannini merged with Bank of America Los Angeles. In 1930, Bank of Italy was renamed Bank of America.

New technologies allowed credit cards to be linked to individual bank accounts. In 1958, the bank introduced the BankAmericard, which changed its name to Visa in 1975. Following the passage of the Bank Holding Company Act of 1956, BankAmerica Corporation was established to own Bank of America and its subsidiaries. BankAmerica expanded outside California in 1983 with its acquisition of Seafirst Corporation and its banking subsidiary, Seattle-First National Bank. BankAmerica continued to operate its new subsidiary as Seafirst until the 1998 merger with NationsBank.

BankAmerica's next acquisition occurred in 1992. The company acquired Security Pacific Corporation and its subsidiary Security Pacific National. At that time it was the largest bank acquisition in history. Federal regulators, however, forced the sale of approximately half of Security Pacific's Washington subsidiary, the former Rainier Bank. The combination of Seafirst and Security Pacific Washington would have given BankAmerica too large a share of the market in Washington state. The Washington branches were divided and sold off to West One Bancorp (now U.S. Bancorp) and KeyBank. Later that year, BankAmerica expanded into Nevada by acquiring Valley Bank of Nevada.

In 1994, BankAmerica acquired the Continental Illinois National Bank and Trust Company of Chicago. At the time, no bank had the resources to bail out Continental, so the federal government operated the bank for almost a decade. Illinois at that time regulated branch banking extremely heavily, so Bank of America Illinois was a single-unit bank until the 2000.

In 1997, BankAmerica acquired Robertson Stephens, a San Francisco-based investment bank. The bank was integrated into BancAmerica Securities and the combined subsidiary was renamed BancAmerica Robertson Stephens. BankAmerica was acquired by NationsBank in October 1998 and took the name Bank of America Corporation.

In 2004, Bank of America announced it would purchase Boston-based bank FleetBoston Financial. Also in 2004 Bank of America acquired Louisville from National City Corporation and rebranded it as BA Merchant Services. Bank of America also purchased FleetBoston Financial. On June 30, 2005, Bank of America announced it would purchase MBNA and was renamed FIA Card Services.

In August 2006 Banco Itaú agreed to purchase Bank of America's operations in Chile and Uruguay. On November 20, 2006, Bank of America announced the purchase of The United States Trust Company for $3.3 billion, from the Charles Schwab Corporation and the deal closed July 1, 2007.

On September 14, 2007, Bank of America won approval from the Federal Reserve to acquire LaSalle Bank Corporation from Netherlands's ABN AMRO North America and the deal closed on October 1, 2007.

On August 23, 2007 the company announced a $2 billion repurchase agreement for Countrywide Financial and the deal closed in July 2008. Countrywide Financial changed its name to Bank of America Home Loans. On September 14, 2008, Bank of America announced its intentions to purchase Merrill Lynch & Co., Inc. and the acquisition effectively saved Merrill from bankruptcy. This acquisition made Bank of America the largest financial services company in the world and the deal closed January 1, 2009.

Bank of America received Troubled Assets Relief Program (TARP) money twice as part of the deal of the merger with Merrill Lynch and repaid the $45 billion it had received from the TARP Program. On August 3, 2009, Bank of America agreed to pay a $33 million fine, without admission or denial of charges, to the SEC over the non-disclosure of an agreement to pay up to $5.8 billion of bonuses at Merrill Lynch. The bank approved the bonuses before the merger but did not disclose them to its shareholders when the shareholders were considering approving the Merrill acquisition.

In 2010, the bank was accused by the federal government of defrauding schools, hospitals, and some state and local government organizations due to misconduct and illegal activities involving the investment of proceeds from municipal bond sales. As a result, the bank agreed to pay $137.7 million, including $25 million to the IRS and $4.5 million to the state attorneys general, to the affected organizations to settle the allegations.

Former bank official Douglas Campbell pleaded guilty to conspiracy, antitrust and wire fraud charges. As of January 2011, other bankers and brokers are under indictment or investigation. Early in the year, the company conducted or announced personnel reductions of 36,000 people.

Bank of America provides services: personal banking, small business banking and corporate and institutional banking. Services provided in personal banking include: credit cards, mortgage, auto and personal loans, insurance, investment services, online banking, home equity and retirement. Small business services include: business checking and savings, credit cards, online banking services, automotive services and health insurance.

Bank of America

In my article entitled, “Are Debit Cards Dead” on my blog on September 16, 2011, I mentioned that some banks would increase their ATM and other fees to $5 due to the changes from the Dodd-Frank Act. No matter how much money a company makes or losses they still find a way to pay their executives millions of dollars a year, so why can’t they pay their debt and manage their money better.

Free checking at some banks such as Bank of America will be eliminated. TD Bank still offer debit cards. Some banks have eliminated or reduced debit card rewards programs. Chase, SunTrust, Continental and United ended their debit card rewards program. Other banks charge business owners a fee when using a business debit card. Bank of America will begin charging customers that use debit cards a $5 monthly fee regardless of the number of purchases made starting early next year.

Debit cards are good because:
• Prevents consumers with bad credit from overspending
• Yu don't have to carry cash, a checkbook or traveler's checks with you
• They are accepted at many locations
• Is easier to obtain than a credit card
• You don’t have to show identification or give personal information at the time of the transaction
• Returning goods or canceling services treated the same as cash
• Avoid finance, interest charges and late fees
• May get perks such cash back rebates, airline miles, etc.
Debit cards are bad because:
• There is no grace period
• Some banks may charge a fee for using a check card as a debit card
• Transactions are verified to see if there are adequate funds
• Some banks process debit charges although insufficient funds are in the account and you will be charged $30 for every transaction that occurs when the account is overdrawn
• May not be accepted by some merchants unless it has a Visa or MasterCard logo
• May place a hold on your debit card for more than the cost of the purchase
• Provides less protection for purchases but you may dispute unauthorized charges or other mistakes within 60 days.

In my article entitled, “Do You Have Swipeitis” on my blog on July 7, 2011, I mentioned that we are addicted to using our debit cards. Here are 13 alternatives to make purchases without using a debit card.

1. Create a budget. Create a budget to track your spending daily or weekly. Set aside a specific amount for extra things you want. One reach that amount don’t spend anymore.
2. Pay your bills first. Pay your bills first. Put a portion of any extra money left over in a savings account.
3. Switch banks. Switch to another bank that has little to no fees.
4. Alternate payment. Write checks, get money orders or cashier’s checks, and use automatic paycheck deduction or online banking to pay bills.
5. Credit union. Switch to a credit union which generally offers the same products and charge lower fees.
6. Pay with cash. Go to the bank or ATM and take out the amount of cash you need for the week. Once you spend that amount don’t withdraw any additional money unless it is an emergency.
7. Use prepaid debit cards. Use prepaid debit cards to make purchases.
8. Local branch. Go to your local branch and make transactions.
9. Get a receipt. Get a receipt each time you make a purchase and keep it.
10. Track spending. Take all of your receipts from your debit card purchases and put them in an envelope. At the end of each week add up the receipts to see how much you spent. Use pen and paper, an Excel spreadsheet or Mint.com.
11. Wait. Wait a few days before making a purchase. Go back to the store to see if you still want the item. If you still want the item, comparison shop to see which store offers the best price.
12. Impulse Shopping. Avoid shopping when you are emotional. This will prevent you from spending more than you have or buying unnecessary items.
13. Leave at home. Leave your debit card at home unless you know you will make a purchase. This helps to reduce the temptation to make an unnecessary purchase.

The best way to send a message to Bank of America that you are not happy with the new debit card policy is by switching to another bank.