This merits close watching. BofA has always been the Fed’s go-to bank in terms of getting its policies enacted, rules followed so that Congress leaves the Fed alone. Now it looks like the New York Fed is getting ready to side with the get-BAC forces who actually think the bank can do something about the dreck it inherited from Countrywide. A deal — recall — that the Fed all but brokered.
It sounds like BAC announced a return to foreclosing on some of its mess too soon for regulators and their overseers in Congress. CEO Brian Moynihan is putting on a brave front about his will “to defend our shareholders,” but private shareholders are junior to BAC’s federal partners. If the feds want BAC to absorb a little more of the pain associated with the Countrywide hangover — either in the form of mortgage putbacks or slowing the brakes on resolution in general — it is hard to see how Moynihan can resist that for long.
His stock price will continue to be tested while scarce revenue is bled away in this fight.
