[Written February 11, 2016]
Bank of America was the idea of a man named Hugh McColl – he ran a Charlotte based bank called NCNB (North Carolina National Bank). At the time, while FDIC insured deposits, banks were mostly regulated by the states, and operating in multiple states was not allowed. Hugh McColl wanted to fundamentally change the banking system, especially the New York banks dominating finance in the Southeast US – choosing which businesses could get loans, protecting Yankee industry from competition. In every way, this was refighting the South’s economic reasons for seceding, triggering the War Between the States in the 1860s.
As banking was deregulated in the 1980s, banks were allowed to become bank holding companies, owning banks in multiple states. Consolidation of banks quickly followed, with Bank of America becoming the successor to all the others, with Hugh McColl still running the combined bank up until 2001. (I worked for NCNB in the late 1970s)
Bank of America’s stock is down 31% in the past month.
Bank of America is the 2nd largest US bank With $1.6 Trillion in assets following only JP Morgan Chase. BofA is still based in Charlotte North Carolina, even after the Pathers loss to Denver. The FDIC couldn’t begin to save BofA from failing. The Fed can keep the bank liquid and help conceal bad investments, but at what price?
Is it time to try the Bernie Sanders approach and let a big bank fail?
Bern it down!