Monday, December 31, 2012

PNC: Charlotte job growth will be faster than U.S.

Charlotte is expected to add jobs at a faster pace than the U.S. as a whole next year, according to an economic forecast from PNC Financial Services Group.

The bank's economists said Charlotte's employment should grow 2.1 percent in 2013, more than the 1.4 percent they predict for the country overall and more than the 1.3 percent the city is slated to record this year.

"Over the long term, low business costs and a young, growing, educated population will enable Charlotte to outperform the U.S.," the economists write

Charlotte should see "strong gains" in professional services and consumer industries in the coming year, according to the forecast. Manufacturing growth should slow, but retail will increase based on expected population growth. The bank says finance and government employment should get its footing back as well.

The unemployment rate will decline, but stay stuck higher than the national average as population increases partially counteract job growth.

DOJ moving slowly on finding Countrywide victims

The U.S. Department of Justice is moving slower than it had hoped on finding minority borrowers who were discriminated against by Countrywide, the Wall Street Journal reports this morning.

The department settled with Bank of America, which bought the subprime lender in 2008, for $335 million in December 2011, resolving claims that Countrywide steered black and Hispanic borrowers into loans with higher interest rates and fees. It was the largest fair-lending settlement in history.

Bank of America said at the time that it had discontinued Countrywide's improper practices, and said Bank of America policies were not at issue.

The $335 million was set aside to compensate the more than 200,000 victims of the alleged discrimination. The department hired Rust Consulting to track them down and ultimately administer the payments. It was hoped the first letters would go out in the summer of 2012.

But it took until just last month for those to be sent, the Department of Justice reported. And the Wall Street Journals says about 10 percent of those have already been sent back undelivered.

The department said at the time that it could take two years for payments to be issued. The Wall Street Journal says officials hoped it could be done sooner, but now aren't hopeful that will happen. A Department of Justice spokesman told the Journal that it still expects to meet the two-year goal.

Friday, December 21, 2012

Cooper, CFPB partner on action against debt relief firm

About 80 North Carolinians who paid Payday Loan Debt Solutions for debt relief but didn't get help will be reimbursed following the first partnership between states and the Consumer Financial Protection Bureau, the state attorney general's office said Friday.

Attorney General Roy Cooper and counterparts in four other states went in with the fledgling financial system regulator to take the Florida-based firm to court. A federal judge in Miami ordered it to pay $100,000 in refunds. 

It's illegal in North Carolina to collect fees up-front for debt settlement services. The other states involved were Hawaii, New Mexico, North Dakota, and Wisconsin.

The CFPB described its first joint enforcement as a "landmark."

McHenry to lead financial services oversight subcommittee

U.S. Rep. Patrick McHenry, a North Carolina Republican, has been tapped to head the House Financial Services Committee's oversight and investigations subcommittee in the next session of Congress.

The committee oversees numerous federal regulators, including the Securities and Exchange Commission and the U.S. Treasury. In the last session, it also conducted hearings looking into the collapse of MF Global

“Government regulators need proper oversight in order to avoid bureaucratic overreach," McHenry said in a statement. "I’m excited to exert greater influence over that process and look forward to ensuring that small businesses across Western North Carolina are able to access the capital they need to grow and expand.”

McHenry, who graduated from high school in Gastonia and now lives in Denver, N.C., will begin his fifth term in Congress when it convenes in January.

Thursday, December 20, 2012

Bank of America to close Cherryville branch

Bank of America will close its branch on Main Street in the Gaston County town of Cherryville.

The bank said it decided to shut the branch down March 8 because of a decline in transactions caused by a shift to online and mobile banking.

The nearest branch is in Lincolnton, about 10 miles away. Bank of America has sent out letters to customers who use the Cherryville branch to give them a chance to get used to other locations.

It will be the second local Main Street branch to close that day. The bank's branch on Main Street in Rock Hill is also closing.

Bank of America CEO Brian Moynihan said in an interview with the Observer on Wednesday that even though the bank is closing branches to reflect customer habits, it is making those that remain bigger and with more specialists.

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Wednesday, December 19, 2012

BB&T opens branch on Rea Road

BB&T said Wednesday that it has opened a branch on Rea Road by the Blakeney shopping center, bringing the Winston-Salem bank's total to 22 in Charlotte.

Tamra Goodson has been named the financial center leader.

“This is a growing and important market for us and we are pleased to expand BB&T’s presence in Charlotte," market president Wes Beckner said in a statement.

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Wells Fargo acquires stake in hedge funds firm

Wells Fargo has bought a 35 percent stake in The Rock Creek Group, a fund of hedge funds based in Washington, D.C., to offer more investment options to its high-income asset management customers, the bank said.

Rock Creek, which has 50 employees and $7 billion under management, will maintain its management structure and investment philosophy. The firm focuses on alternative investments and emerging markets through multi-manager portfolios.

The price of the deal was not disclosed. Wells may acquire a larger stake in the future, the bank said.

Tuesday, December 18, 2012

N.C. banks cut bailout money on their books in half

North Carolina banks have half as much federal bailout money on their books as they did at the beginning of the year -- but still have $212 million in investments from the financial crisis-era program, according to data from financial services firm Keefe, Bruyette and Woods.

Ten of the state's banks remain in the Troubled Asset Relief Program, which the U.S. Treasury has actively tried to wind down this year.

At the beginning of the year, 22 banks had $409 million left, KBW said at the time.

Since then, a number of N.C. banks have had their TARP investments auctioned off to private investors, including Yadkin Valley Financial and Bank of North Carolina.

North Carolina banks that still have TARP:

  • NewBridge Bancorp, Greensboro: $52 million
  • FNB United Corp., Asheboro: $52 million
  • Crescent Financial Corp., Cary: $25 million
  • ECB Bancorp Inc., Engelhard: $18 million
  • 1st FS Corporation, Hendersonville: $16 million
  • Carolina Bank Holdings Inc., Greensboro: $16 million
  • Bank of the Carolinas Corp., Mocksville: $13 million
  • Uwharrie Capital Corp., Albemarle: $10 million
  • Randolph Bank & Trust Co., Asheboro: $6 million
  • AB&T Financial Corp., Gastonia: $4 million

Monday, December 17, 2012

Bank of America stock cracks $11

Bank of America's stock price continued its recent rapid ascent Monday, finishing up nearly 4 percent to close at $11 for the first time in a year and a half.

The Charlotte bank led the Dow Jones Industrial Average on a good day for financial stocks in general. 

Some investment managers attributed the increase to more optimism that a deal would be reached on the “fiscal cliff” -- or tax increases and spending cuts set to go into effect Jan. 1.

The last time Bank of America’s shares closed at $11 was July 5, 2011.

The bank’s shares are now up nearly 98 percent this year. They’ve risen 20 percent in the past month.

Friday, December 14, 2012

Moynihan: Don't push homeownership for all

As a lesson from the mortgage meltdown, lenders and the federal government shouldn't push homeownership as a universal goal, Bank of America CEO Brian Moynihan said at the Brookings Future of Homeownership Forum this morning in Washington D.C.

Instead, he said the focus should be on what makes the most sense in individual cases -- both for families now struggling to keep their homes and for people considering buying houses in the future.

"As we think about the future of the housing system, how does everything we have learned during the crisis and recovery apply?" Moynihan said, according to his prepared remarks. "It underscores the need to shape a system that keeps borrowers out of the situation of owning a home and not being able to afford it. It means shifting the conversation from what percentage of Americans own homes to what is the right solution at the right time for each individual or family."

Moynihan said the housing market recovery is now progressing. Home prices and demand are up, and delinquencies are declining. Thousands of borrowers have been able to get mortgage modifications to help them keep their homes.

But he said that re-default rates are still high. He noted that out of the bank's 270,000 employees, about 50,000 were dealing with delinquent mortgages.

Moynihan said that at this point, the problem is not a lack of programs to help people. It's the still-stagnant economy.

"Important to the housing recovery is letting the process continue to move forward," he said. "To help customers get to the right solution even if that means transitioning to rental."

Going forward, he encouraged homeowners, lenders and federal agencies to "reset" their thinking.

Homeowners should view buying a house as securing a safe place to live knowing the risks, not a way to make a profit, he said.

"A roof over one’s head doesn't always have to come with mortgage debt," Moynihan said. "And in many cases shouldn't."

Lenders should still make ample credit available, but safeguard against giving mortgages to people who can't afford the payments. Down payments don't necessarily need to be 20 percent, but perhaps 10 percent -- and certainly not zero.

And government programs like the Federal Housing Administration should focus on their mission of helping low- to moderate-income people buy homes, and Fannie Mae and Freddie Mac on aiding liquidity -- instead of dominating the mortgage market.

"Now is our chance to reset. Now is our chance to move past recrimination and move toward solutions," he said. "Now is our chance to put lessons learned to use and put our housing finance system on a more sustainable path."

Thursday, December 13, 2012

Bank of America selling stake in Japanese private banking venture

Bank of America said Thursday that it is selling its stake in a joint private banking venture in Japan, another example of the bank shedding overseas business lines.

The Charlotte bank had 49 percent ownership of a private banking group managing investments for wealthy people in Japan known as Mitsubishi UFJ Merrill Lynch PB Securities. The 51 percent owner, Mitsubishi UFJ Financial Group, has agreed to buy out Bank of America's stake.

Bank of America said it would focus on corporate and investment banking in Japan.

 “We see Japan as key to our long term success," said Jiro Seguchi, Bank of America Merrill Lynch’s Japan country executive, in a statement. "We are totally committed to serving our local and international client base in Japan by continuing to invest in our core businesses of corporate and investment banking and global markets.”

In August, Bank of America said it was selling Merrill Lynch's overseas wealth management business to Swiss private bank Julius Baer Group.

Bank of America has spent the last few years selling off businesses and assets that aren't core to its strategy.

Wednesday, December 12, 2012

Bank of America formalizes work- from- home rules

Bank of America has sent out a new, tighter set of guidelines for its popular work-at-home program, known as "My Work," after reviewing how it's gone.

Last week, the Observer reported that the bank was finalizing changes meant to restrict the breadth of the program and letting employees know if they would be affected. The new slate of recommendations and restrictions isn't necessarily surprising.

Some company-wide restrictions include limiting work-at-home to employees in good standing in performance evaluations and current on training, according to a document obtained by the Observer. Bank of America will also indeed ask workers who spend a good deal of time working from home but maintain an office to enroll in "My Work" and give up the space.

Working from Starbucks or the like might not be OK. "Employees are to work from a quiet, safe, and ergonomic location -- free from distraction," according to the document, listing a home office, "My Work" center or bank flexible space as acceptable workplaces.

Managers will still have latitude to determine which job roles are suitable for "My Work" and which are not.

Other suggestions and requirements:

  • New employees should work from an office "whenever possible."
  • Employees will have to attend local company events and meetings in person.
  • People in "My Work" will regularly talk with their managers about their in-person expectations.

The changes could affect several thousand employees in Charlotte.

Tuesday, December 11, 2012

Charlotte Metro Credit Union posts largest yearly membership increase

Charlotte Metro Federal Credit Union said Tuesday that it increased its membership by 9,000 in the past year, the largest annual increase it has ever seen.

This year also marked the credit union's 50th anniversary. In October, Charlotte Metro announced a marketing campaign touting its growth and billing itself a better alternative to banks as the largest institutions weigh new and increased fees.

Charlotte Metro typically grows by 6,000 members in a year.

“Our heightened visibility during our 50th anniversary and a sense of dissatisfaction with banks drove this exceptional member growth,” CEO Bob Bruns said in a statement. “This increase was the intersection of our
50th anniversary branding and the public’s desire for change."

In the first three quarters of 2012, Charlotte Metro also grew its loans 10 percent and assets by 11 percent.

It now has about $290 million in assets, ranking it as a mid-size credit union. For comparison, State Employees Credit Union, the state's largest, has more than $25 billion.

Bank of America donating 2,000 properties to Habitat

Bank of America has committed to donating 2,000 foreclosed properties over the next three years to Habitat for Humanity, which will renovate or rebuild homes on them.

The bank will also pay to demolish structures on the land should it be needed. The goal, Habitat said, is to boost affordable housing in low-income neighborhoods.

“The donation of these properties by Bank of America is a tremendous boost to our efforts to revitalize distressed communities all across the country,” Habitat CEO Jonathan Reckford said in a statement.

The donations could count toward the Charlotte bank's requirement in the $25 billion national mortgage servicing settlement announced earlier this year. Banks will generally get full dollar-for-dollar credit for tearing down homes or donating properties to charity.

Bank of America has the largest share of the settlement, at $11.8 billion.

Update: Bank spokesman Rick Simon said the bank does not intend to seek credit under the national mortgage settlement for these donations at this time. He said the bank plans to be able to meet its obligations through other actions.

A new wave of cyber attacks on banks?

A new wave of cyberattacks against large U.S. banks may be soon to come.

A group of hackers posted a warning online Monday that it would target Bank of America, SunTrust, PNC, and a number of other large banks as a protest.

That's exactly what happened in September, when Bank of America became the first affected in a string of website slowdowns attributed to "distributed denial of service" attacks, in which website servers are flooded by requests to slow down service for customers.

The Credit Union National Association reported Tuesday that it was a victim of a cyber attack it said targeted 30 companies and organizations on Monday. CUNA said no private data was compromised.

Industry publication Bank Info Security is launching a free webinar Wednesday called "The New Wave of DDoS Attacks: How to Prepare and Respond."

Bank of America customers around the country reported sporadic issues getting access to their online accounts on Monday, with some reports still trickling in Tuesday. A bank spokesman said the only issues Bank of America has received involved customers' browser settings.

Monday, December 10, 2012

Wells adds mortgage research director in Charlotte

Wells Fargo has added Greg Reiter, who is based in Charlotte, as a managing director and head of residential mortgage research in the bank's securities division, Wells said Monday.

He will be responsible for developing strategy in residential mortgage backed securities investment for institutional clients.

Reiter most recently worked for Freddie Mac, where he dealt with securitization strategy and investor outreach.

BofA commits $20 million in loans for Sandy victims

Bank of America said Monday that it has committed $20 million that will go toward loans for small businesses and homeowners impacted by Hurricane Sandy.

The money will flow through 13 Community Development Financial Institutions at a zero percent interest rate, and the bank will defer their principal payments. These institutions will make "low-cost" loans to people trying to rebuild.

The Charlotte bank had previously donated $1 million toward storm relief and put $2 million into a recovery loan fund.

Friday, December 7, 2012

Carolinas' credit union leagues could merge

The credit union trade associations in North and South Carolina are pondering merging into one.

The North Carolina Credit Union League and South Carolina Credit Union League have formed a joint task force that will convene in January to figure out what a consolidation would look like.

The credit union leagues advocate for their members at the state and federal government, keep them up to date with legal compliance issues and aid with professional development.

The change comes as South Carolina league CEO Steve Fowler plans for retirement at the end of next year. It also comes as smaller credit unions are consolidating as well.

"It seems to make sense to be more efficient on the trade association side, as well," North Carolina league CEO John Radebaugh said.

The two groups already share compliance staffs and use the same firm for accounting and human resources, he said.

A combination could find more efficiencies  For example, instead of each sending a lobbyist to Washington, they could send just one to represent both states, Radebaugh said.

Alabama and Florida's credit union leagues have already merged. So have Arizona, Colorado and Wyoming's.

North Carolina credit unions have more than 3 million members and $37 billion in assets. South Carolina's credit unions have 1.4 million members and $10.6 billion in assets.

Bank of North Carolina opens regional HQ in Charlotte

Thomasville-based Bank of North Carolina opened a Southern Region headquarters in SouthPark this week across from Piedmont Town Center, the Charlotte Chamber said.

The two-story, 13,000-square-foot building has offices, a drive-through teller window and ATM.

The project has been in the works for months.

“It’s a big step for us, and we’re really excited to make a splash in that area,” regional executive Rob Ellenburg told the Observer in February.

Read more here:

The expanding bank, whose parent company recently closed its acquisition of Charlotte-based commercial bank First Trust, also has a location on Carmel Road.

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Thursday, December 6, 2012 to issue special $1 dividend

Charlotte-based announced Thursday that it will issue a special $1-per-share dividend to stockholders later this month.

Though the company did not mention the "fiscal cliff," it's joining a growing number of companies issuing dividends to shareholders ahead of the automatic package of spending cuts and tax increases -- including a dividend tax hike -- set to kick in at the end of the year.

Charlotte's Cato Corp. announced earlier this week that it would issue a special dividend as well.

Tree is the parent company of online mortgage service LendingTree and other comparison sites.

The dividend will be payable Dec. 26. Judging by the current number of shares outstanding, it will cost the company $11.5 million.

Charlotte woman caught up in Wells Fargo insurance changes

We reported in today's paper that former Wachovia employees who were on long-term disability before the Charlotte bank was bought by Wells Fargo would be terminated by the bank at the end of the year. That means they would no longer eligible for the company's health insurance.

It's a complicated story and full of legal minutiae. But Renee Wilcox, 42, called the Observer today to share how this change will affect her.

Wilcox moved to Charlotte in 1992 and started work for Wachovia the same year. By 2000, she had become a junior trader.

But then she fell sick with a virus on the brain. Before long, she was in a wheelchair, paralyzed on her left side. She went on long-term disability, and paid for a supplemental insurance program with the bank.

She found out over the summer that she would be terminated from employment at the end of the year. Despite numerous phone calls, she hasn't been able to find a way to afford the health care she needs.

"I'm having a hard time finding insurance," she said. "Why couldn't I be grandfathered in?"

She's been able to enroll in Medicare, which helps. But it doesn't cover her expensive medications. That would run her another $700 a month. COBRA coverage from Wells Fargo is prohibitively expensive as well.

"I can't afford to pay $500 a month, plus my bills, on a fixed income," she said.

She's currently in accounting classes at Central Piedmont Community College, but is unsure whether she'll be able to find a job when she finishes. She can't drive, and frequently gets spasms.

She called the Observer hoping that someone might read her story and help her figure out a course of action to afford her medical expenses.

"I hate that I'm in this situation," she said. "I'd rather work."

Activist group to celebrate loan mod from Bank of America

A Charlotte family that has been aided by local activist groups is celebrating Thursday a mortgage modification from Bank of America that will keep them from their homes.

Gonzalo and Silvia Sanchez, along with teenage daughter Jessica, have lived in their University City home for more than 10 years. The couple has also spent considerable money on renovations to help Jessica, who is disabled, navigate the home. She has spina bifida and is unable to walk.

The family's home entered the foreclosure process after Gonzalo found it difficult to find work and fell behind on the mortgage. Activist groups Action N.C. and the Home Defenders League came to their aid, publicly protesting the foreclosure and helping to raise money

The groups announced this week that Bank of America has now offered to reduce the principal on their mortgage by $63,000 and refinance the loan at a lower interest rate, in accordance with the $25 billion national mortgage servicing settlement. That reduces the monthly payment to an amount the family can afford.

The family and the activist groups are hosting a party at the Rutgers Avenue home from 6 p.m. to 8 p.m. Thursday. The party's date coincides with the one-year anniversary of the activists' Occupy Our Homes movement.

Wells Fargo names new insurance division head from Charlotte

Wells Fargo has tapped Anne Doss, who is based in Charlotte, to lead its personal and small business insurance division, the bank said Thursday.

In the role, Doss will oversee auto, home, renters, life, umbrella, property and liability insurance to consumers and small businesses. She will report to Laura Schupbach, who heads Wells Fargo Insurance.

“Under Anne’s direction, I’m confident the personal and small business insurance division will continue to grow as we leverage Wells Fargo’s strong culture of cross-sell, and partner more closely with the company’s business and retail banking groups to provide our customers with improved access to the insurance products they need," Schupbach said in a statement.

Doss will still run the bank's life insurance and disability management business. She was president of Wachovia Insurance Services before its merger with the San Francisco bank.

She takes over for Neal Aton, who is moving to another role in Wells Fargo Insurance.

Wells Fargo is the fifth-largest insurance broker in the world.

Wednesday, December 5, 2012

Bank of America stock blasts past $10

Bank of America stock closed above $10 on Wednesday for the first time since July 2011, surging nearly 6 percent to close at $10.46.

The share price has now fully recovered from its slump in the late spring. After finishing 2011 as the worst performer in the Dow Jones Industrial Average, the Charlotte bank's stock climbed quickly in the first few months of the year. The bank's stock briefly topped $10 on March 26, but closed below the mark and soon  fell below $7.

Bank of America shares are now up 88 percent on the year.

CEO Brian Moynihan appeared on CNBC and at an investors conference in New York on Tuesday to tout the bank's improvement in capital and efficiency.

Mortgage relief workshop starting at convention center

Homeowners looking for help with their mortgages will be able to attend a free workshop at the Charlotte Convention Center beginning Thursday and running through Monday, sponsored by the Neighborhood Assistance Corporation of America.

The event will run from 8 a.m. to 8 p.m. those five days. Representatives from Bank of America, Wells Fargo, Chase, Citi, Fannie Mae, Freddie Mac and several others will be on hand to work with struggling borrowers.

Homeowners will also be able to sign up for an independent foreclosure review under the terms of a legal settlement.

NACA encourages people to register at its website and review the list of documents recommended to have on hand.

This is the third such event NACA has held in Charlotte. The organization said that one man, Junior Laguerre, was able to get his mortgage rate reduced from 6.5 percent to 2 percent, meaning his monthly payments fell from $1,249 to $587.

Wells Fargo suspending evictions for holiday season

Wells Fargo will not evict families from their homes between Dec. 19 and Jan. 2 "in keeping with Wells Fargo values and the spirit of the holiday season," the bank said Wednesday.

Wells will also not move forward on foreclosure sales during that period.

The suspension only applies to mortgage loans Wells Fargo owns. Wells will follow the rules set by the investor that owns the loans the bank services.

Fannie Mae and Freddie Mac, the mortgage giants that own roughly half the nation's loans, both announced this week that they were halting evictions during the same period. Freddie Mac's period actually begins two days earlier, on Dec. 17.

Tuesday, December 4, 2012

Merrill Edge launches retirement tool that virtually ages you

Bank of America is hoping images of looser jowls and wrinkled brows will make people save more for retirement.

The investment bank has introduced a feature to its online retirement program that aims to encourage people to save by virtually aging the customers' photo to show what them what they'll look like when they're older.

Called Face Retirement, it's now a part of the Merrill Edge platform, which serves mass affluent customers.

“In a Stanford University experiment, people who saw age-enhanced images of themselves were more likely to save more for retirement, compared to those who weren't exposed to their future selves,” Merrill Edge head Alok Prasad said in a statement.

The bank also cites a New York University study that showed that people who saw their age-forward pictures said they'd put 6.75 percent of their pay into their 401(k), compared with 5.2 percent for those who hadn't.

The site gives you a range of ages to choose from and gives you the option of sharing them on Facebook. So you'll know what we're talking about, here's what it says I'll look like at age 77:

And age 107:

Not bad for a centenarian.

Monday, December 3, 2012

Would you get a mortgage from Walmart?

Would you take out a mortgage from Walmart? Turns out about one-third of you would at least think about it, according to a study from Charlotte-based Carlisle & Gallagher Consulting Group.

The company found that 80 percent of people would consider a mortgage from a non-bank. One-third would consider a mortgage from Walmart, and nearly half would take one from PayPal.

It's not as crazy as it sounds. Walmart has been steadily increasing its financial services offerings.

BNC closes First Trust acquisition

BNC Bancorp has closed its acquisition of Charlotte-based commercial bank First Trust.

The deal was announced in June, when it was valued at $35 million. By the time it closed, First Trust's stock had risen, valuing the deal at $38.1 million.

High Point-based BNC Bancorp is the parent company of Bank of North Carolina, which has several offices in Charlotte.

First Trust's offices in Charlotte and Mooresville will keep their name until February, when the two systems are merged, BNC said.

"The completion of this merger is a product of a lot of effort and great teamwork between the BNC and First Trust organizations," Bank of North Carolina president Rick Callicutt said in a statement. "The Charlotte area represents an attractive, growth-oriented market for us and this merger provides a strong presence in Charlotte and further establishes BNC's position as a Carolinas-focused financial institution."