BofA warned by regulators to get stronger: report

Tue Nov 22, 2011 4:00pm EST

A Bank of America customer leaves a banking branch in Charlotte, North Carolina, October 13, 2011.REUTERS/Chris Keane

A Bank of America customer leaves a banking branch in Charlotte, North Carolina, October 13, 2011.

Credit: Reuters/Chris Keane

(Reuters) - U.S. regulators have informed Bank of America's (BAC.N) board that the company could face public enforcement action if they are not satisfied with recent steps taken to strengthen the bank, the Wall Street Journal said, citing people familiar with the situation.

BofA has been operating under a memorandum of understanding since May 2009. The memorandum, which is not public, identified governance, risk and liquidity management as problems that had to be fixed, the paper said, citing people familiar with the document.

In recent months, regulators met with BofA's board and said they wanted to see more progress on the bank's compliance with the memorandum, the Journal said.

In the absence of progress, the informal order could turn into a formal and public action, which would likely mean intensified scrutiny and greater restrictions, the paper said.

However, the newspaper said that BofA's directors believe the bank has met demands set out in the 2009 document.

Now, "the board's view is it's time to take us out of the penalty box," one person familiar with the situation told the Journal.

Bank of America spokesman Larry Di Rita declined to comment on the Journal report to Reuters.

(Reporting by Sakthi Prasad in Bangalore and Rick Rothacker in Charlotte, North Carolina; Editing by Muralikumar Anantharaman)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see
Comments (30)
Old_Ollie wrote:
Get stronger or what? I’m rooting for “or what.”

Nov 21, 2011 11:10pm EST  --  Report as abuse
Dave2009 wrote:
Bad time to be a bank it seems.

You can’t make enough money to get to that happy place to please the Fed. So the fed makes it even tougher on you to get to that happy place. Hey… isn’t that what banks do to businesses they loan to?

Reminds me of that old complaint, “Hey if I had that much money in the bank I wouldn’t need the loan I’m asking you guys for!”

I must be dreaming, it can’t be that simple, right? .

Nov 21, 2011 11:11pm EST  --  Report as abuse
ChuckShire wrote:
Looks like that Masters in Business ain’t doing you guys and gals squat!
That is what happens when the bottom line you always go for bottoms out.

Nov 21, 2011 11:30pm EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

A tourist takes a plunge as she swims at Ngapali Beach, a popular tourist site, in the Thandwe township of the Rakhine state, October 6, 2013. Picture taken October 6, 2013. REUTERS/Soe Zeya Tun (MYANMAR - Tags: SOCIETY) - RTR3FOI0

Where do you want to go?

We look at when to take trips, budget considerations and the popularity of multigenerational family travel.   Video