Bank of America May Sell Off Branches to Resolve Financial Issues

Bank of America has told U.S. regulators that it is prepared to retreat from some parts of the country if its financial issues continue their downward spiral, the Wall Street Journal reported. While the bank is not certain that drawing back Bank of America locations will be a definite course of action, the option sits high on its list of emergency scenarios.

Bank of America Continues to Suffer Financially

Bank of America Corp., which is the second-largest U.S. bank by assets, has suffered its share of financial woes over the past few years. Just in December, the company was required to pay $335 million to compensate Countrywide Financial Corp. borrowers who were charged higher rates on their mortgage loans based on their race or national origin.

The bank has also been in billion-dollar robo-signing settlement talks with federal banking regulators that say the lender, along other major mortgage servicers like JPMorgan Chase, mishandled foreclosures. These issues are coupled with the bank’s bailout by the U.S. government during the financial crisis of 2008.

Since that time, Bank of America Chief Executive Brian Moynihan has reportedly worked to gradually streamline the company and build capital, but investors feeling disappointed with the speed of the turnaround, have pulled back from the company.

Selling BofA Branches an Emergency Option

As Bank of America‘s financial pressures continued to mount last year, company executives submitted a list of emergency scenarios to the Federal Reserve with possibilities for resolving its money issues. Among the scenarios on the list was a possible geographic cutback of Bank of America locations.

While a cutback is reportedly not imminent, the bank is considering the possibility of selling some of its branches at the risk of losing customers it recently spent large sums of money to lure.

Bank of America has also considered selling a class of shares based on performance of Merrill Lynch & Co., the securities firm owned by Bank of America, but reportedly hasn’t made a definite decision regarding a course of action.