Robert H. Smith

There are several factors that Bank of America's managers must have known when they recently started testing a new fee schedule for consumers.

Nothing lasts forever as evidenced by the short term marriage of Hollywood stars. Differences in attitudes, status and in some cases just irreconcilable differences often cause breakups following many years of being together. One of fraying relationship is the 100 year plus association between the 6,000 plus smaller community banks and the nation's largest banks. This long standing relationship between big and small is on the rocks as the two groups have drawn apart, rarely working together or supporting one another anymore.

Bank of America is running television ads depicting a son telling the story of how family loyalty to the bank is based on his parents approaching their local B of A branch manager some 71 years ago to finance selling hot dogs from their stand on a local corner. The piece notes that the parents offered no collateral but gained the confidence of the local manager of their potential success. This story is consistent with the history of the bank going back to its founder, A.P. Giannini who consistently worked to meet the needs of small businesses in developing areas and during difficult times.

I was at a summit with 300 other community bankers when we were startled by chants of "Make Banks Pay!" Occupy Wall Street and related groups see no solutions coming out of Washington they are attacking bankers as public enemy #1.

Understanding the management of Bank of America is now next to impossible. What makes them want to anger 50 plus million solid retail customers while their entire operation is in damage control? Five million customers from the bank I headed joined this group when B of A acquired it in 1992.

Bank of America's biggest conundrum is what to do about the Countrywide Financial situation. This 2008 acquisition called by some the worst corporate acquisition ever, has become the primary albatross hanging around B of A's neck — one that CEO Moynihan confesses is on his mind nearly every day.

The administration is introducing the American Jobs Act to Congress in attempt to alleviate the prolonged high levels of unemployment. The act includes payroll tax cuts, tax credits, extended jobless benefits, fixes for school infrastructure and road repairs.

Twenty years ago I engineered the sale of Security Pacific Bank, at the time the nation's fifth largest bank, to Bank of America. On August 12, 1991, the day the deal was announced BofA's stock closed at $10.00. Today it closed at $7.65 a decline of 23% over the past two decades.

Congress has expressed deep concern about the regulatory control of banks, yet at the same time wants banks to aggressively finance business and economic growth.

It's hard to imagine that new systemic capital requirements for large banks will not raise the expectations for community banks.