Bank of America's Return to 1950s Style Banking Is Paying Off

No sooner had Brian Moynihan taken the helm of Bank of America at the start of 2010, than the giant lender suffered wave upon wave of giant, potentially fatal, losses on its stricken mortgage portfolio. From the start, Moynihan championed a highly conservative strategy of growing with today's customers instead of courting risky new ones. The idea was to attract more business from the folks who already banked mainly with BofA, and let go the customers who got their mortgage, and deposited their paychecks, at the cross-town competitor. If revenues grew with the overall economy, costs remained flat, and BofA avoided the steep credit losses that plagued it in the past––specifically by sticking with those reliable customers, Moynihan claimed, it could become a money machine. Essentially, he advocated a return the 1950s style, bedrock banking that had been highly successful prior to the financial crisis, and he said, could rise again.