Mr. Brian Moynihan
CEO, Bank of America
100 North Tryon St.
Charlotte, NC 28255-0001
July 4, 2011
Dear Mr. Moynihan,
Why is your bank telling me to f**k off?
Dear Mr. Moynihan,
I am a small businessman. I own two restaurants which generate around 1.5 million dollars a year in revenue. Both businesses do their banking with Bank of America. One of my businesses has a $45,000 line of credit with Bank of America which has a balance of about $26,000. The terms are 7.25% interest with a 10 year draw down. We are ~3 years into the draw down period which means I should have 7 years left on the use of this line of credit.
I recently received a letter from Bank of America informing me that my line of credit will be closed at the end of 2011, with the balance due and payable at that time. The letter did not provide any reason for this change though it cannot be that I am in arrears because a payment is automatically deducted from my account by the bank each month.
I use that line of credit to even out the cash flow of my business and replace equipment so I can keep operating. It helps me provide a service to the community while keeping 18 people employed. I know 18 is not a lot of employees, I suspect that 18 Bank of America employees will read this letter before it finds it’s way to someone who actually cares about my small business.
This business pays Bank of America about $13,000 per year for merchant services, interest, and assorted fees. I wonder how many new consumer accounts you would have to attract to make $13,000 a year in fees. I suspect it is quite a few. I know that on my own personal accounts I don’t pay you more than a hundred dollars a year in fees. Let’s call it a hundred even just for the sake of argument. You would need 130 new customers just to make up for the loss of my business and yet here you are doing your utmost to lose my business. As a businessman who fights everyday to keep each customer, this is a little perplexing to me.
Maybe banks aren’t in the business of loaning money anymore, I don’t really know. Maybe you just take all that free money from the government and use it to play the stock market and create speculative bubbles. Maybe that $26,000 balance, which you borrowed from the Fed at 0% interest and for which I pay you 7.25% interest, is just eating away at your $2.25 trillion dollar balance sheet. Maybe you could instead leverage it at 50 times it’s value to make sketchy investments which will lose tens of millions of dollars that the government will give back to you free of charge, no strings attached. You will not have made any money on the deal, but some hotshot MBA in finance will make an extra million on his year-end bonus, for which he will only have to pay 15% in taxes because bonuses aren't really income.
As I mentioned, I don’t really know what business banks are in anymore, so maybe all of that is just wild speculation on my part; nothing as absurd as all that could happen in the real world, right? Free money from the government? Leveraging money at 50 times it’s value? Taxpayers paying for your losses? Bonuses that aren’t income? That’s practically science-fiction, isn’t it?
I’ll get to my point now, Mr. Moynihan, I am writing to ask you why. Why am I losing my line of credit? Why do you seem to hate small businesses? Why do banks exist? Why don’t you want me to be your customer anymore?
Thank you for your time, sir. I look forward to your response.
Sincerely,
Xxxx Xxxxxx
Xxxxxxx Xxx Xxxxxxxxxxx, Inc.