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Sucking Up, Making Good: A Primer From Bank Of America

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When you owe the government so much money that they are basically calling the shots, it's not a good idea to be on their bad side. Hell may have furies worse than Tim Geithner scorned, but the little guy's ankle-biting was bad enough for Ken Lewis & Co. So the august wise men of Charlotte got together and came up with a new plan:
Kiss more ass.

In late August and early September, the bank made a decision to be more aggressive, hoping to reverse its luck.
On Sept. 11, Mr. Lewis met with Treasury Secretary Timothy Geithner and talked about the bank's desire to repay TARP, according to people familiar with the meeting. Mr. Geithner made it clear that the bank would need to raise new capital to get out.

In October, following the surprise retirement announcement from Mr. Lewis, Bank of America and its board decided to propose a full payback. The company told regulators it might be willing to raise about $10 billion through a common-stock offering, or as much as it was authorized to issue, said a person close to the process.
But regulators said that wasn't enough.

Yes, master. Whatever you say. We will raise more money.

Dozens of examiners from the Federal Reserve and Office of the Comptroller of the Currency were assigned to the project, to make sure a full payback wouldn't put the company or financial system at risk.
At one point, Bank of America planned to issue $4 billion in trust preferred shares but scrapped that idea because of regulatory concerns.

OK. Time to really turn on the charm in a big way. Someone tell KL to keep his damned mouth shut.

Meanwhile, bank officials made progress in convincing federal officials that it was serious about regulatory reform.
On Oct. 21, Bank of America executives Brian Moynihan and Anne Finucane met with Obama administration advisers Valerie Jarrett and Larry Summers, telling them the bank wanted to work with the White House to help it achieve its policy objectives in small-business lending, certain consumer-banking products and loan modifications.
The talks led to changes in Bank of America's overdraft policy and new credit-card rates, according to people familiar with the discussions.

Remember, though: We owe these guys $45 billion. We're really gonna have to lay it on thick. Let's pretend we give a damn about all of those poor Sun Belters in danger of losing their poorly-built, tacky homes.

Barbara Desoer, the head of Bank of America's mortgage operations, pledged to the Treasury that Bank of America would improve its loan-modification efforts, accounting for at least 25% of all the trial modifications in the Obama administration's program, according to a person familiar with the talks.

It's important to show that you are just like everyone else, a suffering, salt-of-the-earth kind of guy who just happens to be a millionaire bank executive.

The talks required so much of his time that Mr. Curl didn't attend to a painful broken tooth until this week. When regulators raised concerns on Thanksgiving Day about the bank's exposure to debt problems in Dubai, Mr. Curl led conference calls from his farm in Lebanon, Mo.
The 61-year-old Mr. Curl said he was encouraged by the cooperation between the bank and government. "I raise cattle," he said. "The only way to drive cattle quickly is slowly. If you try to rush these negotiations, it's not going to work."

BofA Prices Securities as TARP Exit Starts [WSJ]