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What’s behind a union’s full-court press to take down BofA’s Kenneth Lewis?

A labor union’s drive to force changes at Bank of America Corp. will soon reach a boiling point. And some are beginning to question the motives behind the group’s barrage of advertisements and petitions.

The Service Employees International Union, an organization with more than 2 million members, and Change To Win Investment Group, a union pension fund that owns BofA shares, are making the BofA effort a top priority for the next two weeks. Union reps will appear on TV news shows and produce YouTube videos, circulate “fact sheets” on the bank, host petitions and protests outside bank offices and offer to make disgruntled BofA employees available to reporters to push their message.

But observers and even competing bankers say the attack has a broader goal: to push labor reforms that would help unions form at BofA and other banks.

“They’re after blood. They’re chumming the waters for sharks,” UNC Charlotte finance professor Tony Plath says of the union’s campaign. “I’m not a cheerleader for BofA. But let’s be objective about this: These attacks are all about card check.”

Charlotte Business Journal - by Adam O’Daniel Staff writer
A labor union’s drive to force changes at Bank of America Corp. will soon reach a boiling point. And some are beginning to question the motives behind the group’s barrage of advertisements and petitions.

The Service Employees International Union, an organization with more than 2 million members, and Change To Win Investment Group, a union pension fund that owns BofA shares, are making the BofA effort a top priority for the next two weeks. Union reps will appear on TV news shows and produce YouTube videos, circulate “fact sheets” on the bank, host petitions and protests outside bank offices and offer to make disgruntled BofA employees available to reporters to push their message.

And that message?

SEIU is collecting thousands of “taxpayer proxies” that call for BofA Chief Executive and Chairman Kenneth Lewis to be fired. Organizers plan to deliver them to BofA headquarters uptown on April 29 before the bank’s annual meeting that day.

“Taxpayers are now the biggest shareholders in the bank,” says SEIU executive Stephen Lerner, referring to the $45 billion in government capital on BofA’s books. “Every taxpayer should have the opportunity to vote.”

The group won’t disclose how much it is spending on the campaign.

The union is sponsoring a resolution at the annual meeting to have Lewis removed as the bank’s chairman. And it will likely stage protests outside the meeting.

The same group circulated a petition this spring asking President Obama to fire Lewis in the wake of Rick Waggoner’s ouster as General Motors Corp. chief executive.

A broader agenda
But observers and even competing bankers say the attack has a broader goal: to push labor reforms that would help unions form at BofA and other banks.

“They’re after blood. They’re chumming the waters for sharks,” UNC Charlotte finance professor Tony Plath says of the union’s campaign. “I’m not a cheerleader for BofA. But let’s be objective about this: These attacks are all about card check.”

Taking the fight to BofA, Plath and others suggest, allows the union to build support for proposed federal legislation called the Employee Free Choice Act, commonly called “card check.” It would allow unions to form by way of a majority, public vote. Secret ballots would no longer be required.

BofA officials say the bank hasn’t taken a position on the legislation. A spokesman declines to speculate on the union’s motives for its campaign, but he does say some of its materials are misleading.

“We’re not trying to pick a fight with SEIU. Some of their members are loyal customers,” BofA spokesman Robert Stickler says. “On the other hand, we’re trying to set the record straight. A lot of their information is inaccurate.” (See related story.)

Plath believes the SEIU is seizing the opportunity to raise the profile of its agenda. BofA is an easy target, he says, because it has been embroiled in controversy. By accusing a major company such as BofA of abusing consumers and workers, labor groups stand to gain support in Congress for changes, Plath says.

“It’s not a coincidence that one of the unions that would benefit most from some changes (to labor laws) is going after Bank of America,” he says.

Bert Ely, a banking consultant based in Washington, says banks historically have resisted union organization. There are no unionized banks in the United States. But he expects recent government intervention in the financial sector to fuel union attempts to gain influence.

“I wouldn’t be surprised if this is to try and create a political climate where Congress will mandate banks have some form of community or union representation on their boards,” Ely says. “There are certainly broader agendas at play.”

Teller unions?
There is speculation among local bankers that the SEIU would like to form teller unions. And the SEIU mentions teller salaries and complaints in some of its anti-BofA literature.

“I think the Bank of America attacks are really misguided,” the president of a local competing bank says. “The calls to fire Ken Lewis just don’t make sense. Who is going to do a better job? You don’t change CEOs right now.”

Lerner, the SEIU executive organizing the efforts, says the union is focused on leveling the playing field for consumers and workers who feel “betrayed” by mega-banks.

He criticizes BofA for its account fees, credit-card rate hikes and wages paid to lower-level employees.

“It’s time to expose Bank of America’s abuse of consumers, mistreatment of employees, and dangerous self-serving profit model,” the union says in its recent literature.

But Lerner also acknowledges that building stronger unions is part of the mission, and he feels BofA’s leadership opposes changes to union laws.

“We need to put more money in people’s pockets, and one of the best ways to do that is by restoring the ability of people to join together and form unions,” he says. “We think bank workers and all kinds of workers should have that ability to form unions.”

Plath says the SEIU’s focused attack on BofA’s banking policies is misguided because the bank follows industrywide practices. He contends BofA’s methods of business and customer fees are all in line with those of its competitors.

“SEIU needs to tell the whole story,” Plath says. “You’ve gotta criticize the entire industry’s practices, not just one company. Bank of America doesn’t do anything different than the others. They’re probably better than some of their peers in some practices.”

The latest American Customer Satisfaction Index ranks BofA second to Wachovia Corp. in customer satisfaction, ahead of peers such as Wells Fargo & Co. and Citigroup Inc.

Still, Lerner says BofA is the prime target because it leads the field.

“Bank of America is the biggest. They set the trends,” he says. “If Bank of America did something different, because they’re so big, it would force others to follow.”

FACT OR FICTION?

The Service Employees International Union has made accusations about Bank of America’s practices and policies. Here are a few of the claims and the facts:

SEIU claim: Bank of America participated in “risky profit schemes,” such as subprime mortgages.

Fact-check: BofA stopped issuing subprime mortgages in 2001. The bank did participate in some of the more exotic investments tied to the housing boom.

SEIU claim: BofA is the “poster child” for corporate excess. The union cites bonuses handed out at Merrill Lynch & Co. and former Merrill CEO John Thain’s lavish office renovations.

Fact-check: SEIU is right about huge bonuses and expensive office renovations. The problem is that Bank of America didn’t own Merrill when those actions took place. There’s room for debate about how much BofA knew about the Merrill bonuses late last year. But the office renovations took place months before a BofA-Merrill merger was discussed.

SEIU claim: BofA preys on consumers with overdraft fees and credit-card rate hikes.

Fact-check: The bank does have some of the highest overdraft fees in the industry, according to Bankrate.com. However, competitors such as Citigroup Inc., JPMorgan Chase & Co. and Wells Fargo & Co. charge similar fees. BofA also this week decided to back off from its plans to raise overdraft fees on account holders. As for credit cards, BofA’s recently announced rate hikes give borrowers the option to keep the lower rate if they agree to make no new purchases with the card.

SEIU claim: BofA is actively fighting the Employee Free Choice Act.

Fact-check: BofA says it hasn’t taken an official position on the issue and denies it lobbies lawmakers to oppose it. Some trade groups with ties to BofA, such as the U.S. Chamber of Commerce, are aggressively fighting the legislation.

Posted by Admin on 04/17 at 11:38 AM
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