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From 2002, until 2006 I worked for MBNA America Bank, until we were bought out by Bank of America. I worked in the consumer finance division, overseeing various collection portfolio's over the course of a Two-year period. During this time, we operated a program, referred to in house as, "House Calls"

The way the "House Calls" program worked was all customers who were between 30-day's past due and 120-day's past due were transferred to a special team who would attempt to sell the customer on a Home Equity Line of Credit, to pay off their unsecured credit card or consumer finance loan debt. Essentially, they would pay off their unsecured debt with a secured loan tied to their mortgage. This was a money making machine for Bank of America, so much so that monthly incentives were tied into the number of transfers a collection associate made that translated into a sell.

I began questioning the process of soliciting 120-day and 90-day accounts for the House Calls program, because at the time working in the trenches with customers who were past due, I recognized these programs would not resolve the underlying issue of their delinquency, only transfer their financial problems from portfolio to another and could ultimately cause them to lose their homes. I spoke out against this policy in staff meetings, was counseled repeatedly for failing to solicit customers on the program, and eventually left the company, after a stellar and very successful career in collections.

One of the factors used to gauge whether or not a Home Equity Line of Credit (HELOC) could be extended to a delinquent customer was their Fico score. Customers who were over 500, which was considered Poor at the time, were eligible for solicitation. Keep in mind these customers also were in a financial situation that prevented them from being able to pay a consumer finance loan for up to 4 months. These were the types of customers who were being solicited for a HELOC.

Using proprietary programs, a collection manager could calculate the amount of time it would take to pay off their debt by making a minimum payment each month. As an example, one customer had a loan for a Scooter Store scooter. The loan was only for a few thousand dollars, but this person was on a fixed income and could only budget for the minimum monthly payment. Using a collection calculator, I was able to factor in a total of over 65,000 years, it would take for this customer to pay off the loan, by only paying the minimum amount. The reason for this, prior to the financial reforms was the interest rate on an unsecured loan, and the amount of the monthly finance charge taken out of the minimum monthly payment. Each month this customer was only seeing pennies applied toward the principle. These were the customers who were prime candidates for the House Calls program.

This was predatory lending, hands down. I was part of it, I am ashamed of my part in it. I have written to Senators and Representatives, I even contacted President Obama's campaign in 2008 to let them know all of this information, in the hopes something would be done. Yet, here we are in 2014 and Bank of America is in the process of crafting a settlement, but no one will be held accountable. The general public doesn't even know the full or insidious extent these financial institutions went through to set customers up to fail. Every time I see a story about a bank foreclosure, I wonder how many people I sent to the House Calls program who ended up losing their homes, all so I could collect a bonus check each month, get a promotion, or keep my job. How many of them suffered for my actions?

At some point we are all faced with a decision to be a decent human being and do what is right, or to do what is in our self-interest regardless of whether it is decent, human, or right. I like to think I made the right choice by walking away from that industry and speaking out about my experiences, but what good does it do for me to educate people if no one is willing to listen? How can we stop these situations from recurring, if no one is held accountable?

MBNA was an amazing company to work for. Flawed, yes. Amazing, absolutely. When Bank of America took over, every positive thing that existed with MBNA died a slow and painful death, until everyone, customers and employees were reduced to numbers on a screen. Bank of America should never have been allowed to purchase MBNA. While a massive settlement with the Department of Justice is the right thing for those affected, I believe this will only be solved by breaking up corporations such as; Bank of America!

Originally posted to Lunaril Larentia on Fri Aug 08, 2014 at 08:59 AM PDT.

Also republished by Community Spotlight.

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Should Financial Corporations such as; Bank of America, be broken up into smaller entities to prevent them from being, To Big To Fail?

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