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Bank of America most griped about bank, CEO pay rises

As Bank of America is named as the bank with the most borrower complaints, their CEO sees a 70 percent increase in his pay in the last year – what is going on here?

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Bank of America – most complained about lender

According to the U.S. Consumer Finance Protection Bureau (CFPB), Bank of America had the most consumer complaints of all banks in a recent report. Bank of America services roughly 15 percent of all u.S. loans, yet accounted for 30 percent of all mortgage complaints, primarily regarding their handling of loan modifications, debt collection and foreclosures, and customer service.

The bank and several analysts point to their acquisition of Countrywide to their demise, as the leader of subprime loans, and they also point out that the CFPB reveals that 98 percent of complaints have been resolved.

Conversely, Wells Fargo ranked as the least complained about lender, accounting for only 16 percent of all mortgage complaints, meanwhile servicing 21.5 percent of all American loans. Most of their complaints involved loan modifications and foreclosures, as did the majority of other banks with flailing brand reputations.

Meanwhile CEO gets a 70 percent pay increase?

Since the 2008 acquisition of Countrywide, the bank has lost tens of billions of dollars on those loans and has had to foreclose on many, many homes for nonpayment. Many point to Countrywide as the bane of Bank of America’s existence, but even so, the overall brand has had 15,136 complaints recorded by the CFPB since December 2011.

Meanwhile, according to The Charlotte Observer, Bank of America CEO Brian Moynihan was awarded $12 million in base salary, stock awards and other compensation for his 2012 performance, representing a 70 percent jump from the year prior when he was awarded $7 million in total compensation.

In a filing with the Securities and Exchange Commission (SEC), the increase is based on improved profit margins and progress toward resolving mortgage-related problems. In other words, Bank of America’s books are improving, so Moynihan is paid based on performance.

Interestingly, he’s not even the top paid executive at the bank, as Co-Chief Operating Officer Thomas Montag, was paid $14.5 million in total compensation in 2012. Additionally, he’s not even the top paid bank CEO, as The Observer reports that Wells Fargo CEO John Stumpf made $22.8 million and JPMorgan Chase’s Jamie Dimon made $18.7 million, while Citigroup CEO Michael Corbat made $12.4 million.

So why the disconnect?

Bank executives are paid more when the bank meets certain targets, and less when they don’t, and customer complaints do not factor in to the equation, even though some believe it should. The CFPB is still a young organization, so the impact of the government more closely monitoring consumer problems may eventually become a part of executives’ pay structure, but right now it is not associated.

Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

Business News

Supreme Court okays trademarking for ‘generic’ name URLs

(BUSINESS NEWS) Generic name trademarks have helped to stave off monopolies of broad products and services, but the Supreme Court just ruled that generic company names like Booking.com, can now be trademarked.

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For years, The United States Patent and Trademark Office has denied rights to names termed as “generic.” This was previously used to prevent generic terms from monopolizing a section of the market. It has prevented many companies from doing that as well.

However, as we move into the 21st century we begin to see things that may not be so cut and dry. As usual life gets messy and things are far more grey than they previously have been.

Recently, the US Supreme Court ruled that website names are eligible for a change to the previous trademark rules. The website that pushed for this privilege first, Booking.com that is owned by Booking Holdings Inc., argued that they needed this ruling to stop consumers from following copycats down a rabbit hole and away from their business.

The decision, heavily weighted at 8-1, gives Booking.com, nationwide legal protection against competing companies trademarks.

A remark released later by Justice Ruth Bader Ginsburg and the Supreme Court states, “We have no cause to deny Booking.com the same benefits Congress accorded other marks qualifying as nongeneric.” An argument quoted from the decision continues as since, “‘Booking.com’ is not a generic name to consumers, it is not generic.”

This stance, taken by the majority, exemplifies a firm position on the rights of the individual companies’ abilities to identify themselves as they see fit.

The lone dissenting vote coming from Justice Stephen Breyer who argued that he fears that this decision “will lead to a proliferation of ‘generic.com’ marks, granting their owners a monopoly over a zone of useful, easy-to-remember domains.”

Honestly, if you can’t come up with your own domain that either incorporates, but doesn’t copy, or gets your point across without being too generic, you may need to hire a PR person.

This move forward from the Supreme Court opens up a lot of possibilities for people to be creative with their businesses. If generic and simple names will be the norm, then people will have to think outside the box in the future. Bring on the challenges.

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New company beats Amazon with next morning delivery?

(BUSINESS NEWS) Amazon has a new competitor in South Korea: Coupang, with faster shipping than Prime.

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What if I told you Amazon Prime’s, 1-3 day guaranteed delivery time isn’t the fastest e-commerce service the world has to offer? You would think I’m lying right?

Coupang, one of the world’s fastest delivery services located in South Korea, allows you to order any item, anytime before midnight, promising that it will be at your doorstep by 7am! (I wasn’t lying!) With 70% of its employees living within a 10 minute radius of a Coupang center, 80% of residents residing in populated cities and 95% of it’s population owning a smartphone, South Korea has become the perfect e-commerce epicenter. Coupang employees over 10,000 people who together deliver 99.3% of all orders within 24 hours. Imagine it’s Tuesday night, you’re falling asleep and suddenly remember you forgot to get your wife a present for her 50th birthday tomorrow. You have two options: accept your fate of being put in the dog house for three long weeks, or quickly order a few great items off Coupang’s website that’ll be delivered BEFORE she even wakes up!

Like Amazon, Coupang allows its customers to create a profile, store desired products in a list, and check out using your saved payment method. Half of South Korea’s total population of 51.6 million has installed Coupang’s app with a surge of people trying Coupang for the first time during stay at home orders due to the Coronavirus pandemic. The company struggled to meet fulfillment demands, especially those including PPE, household cleaning products, and children’s necessities. While many companies are struggling to stay afloat, Coupang is quickly adapting to meet consumer demands. In March, the company opened a new logistics center to expand its overnight/same day delivery services and is currently working to reach an even broader population.

Believe it or not, right before Coupang received a $2 Billion investment from SoftBanks, its founder, Kim Bom debated walking away from it all. Bom founded the company in 2010, receiving the investment in 2018 and is expected to pursue an IPO by the end of 2020. So for all of you entrepreneurs wondering if you should give up on that decade long dream…DON’T. Coupang went from selling a few hundred items each day to 3.3 million. Now that’s what you call entrepreneurism!

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Google plans to pay publishers for content (a little too late)?

(BUSINESS NEWS) Google will finally pay publishers for news, but only a few, and they have to meet Google standards.

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I mean…could you get any greedier Google? (Chandler Bings voice).

After years and years of pressure and complaints from publishers that Google’s search feed doesn’t properly recognize them or the news they work so hard to report, Google has finally announced that they will begin to pay publishers for content. But only some.

WHAT A LOAD OF BS.

According to the News Media Alliance, Google profited 4.7 BILLION in 2019 as a search engine for the news industry. So now, not only is Google fleecing its content providers and the writers who are working to create material for them, but it’s quite likely that Google’s algorithm is pushing paid news to the top of its search feed. What does this mean for users? It means that for one, you will see what they want you to see, but most importantly, it means that Google HAS the money to pay its publishers but chooses not too!

Google’s announcement to start paying publishers excludes all publishers outside Brazil, Germany, and Australia. Even within the countries that Google closed a deal with, there are many that do not meet its “high quality content” requirement for a paid position. The problem with all this nonsense is that we stopped letting the news come from others like us, and instead, according to the U.S News Media Alliance, the news is entirely owned by a handful of companies. You may have 635 channels on your TV, but if you google…or maybe you should duck duck go it, you’ll find that all those channels lead back to one huge organization.

SO WHAT THE HELL IS GOING ON?

Google has definitely been pressured to make some big changes, and while paying publishers is a good first step in the right direction, is it enough to make up for years of damage?

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