On September 15, 2008 Bank of America acquired the investment bank Merrill Lynch.

Bank of America

Bank of America is the nation’s largest consumer bank and received $15 billion from the Treasury Department’s Capital Purchase Program (CPP). This is in addition to the $10 billion Merrill Lynch , acquired by Bank of America, received from the same program.

Bank of America traces its origins to the founding of the Massachusetts Bank in 1783, however it was the 1998 acquisition of BankAmerica by NationsBank that actually gave birth to the name Bank of America. This was followed by the 2004 acquisition of FleetBoston and 2005 purchase of credit card giant MBNA.  2008 has also been a growth year for the Charlotte, NC-based banking giant. In January B of A acquired faltering mortgage lender Countrywide Financial for $4 billion and followed up with the blockbuster $50 billion acquisition of Merrill Lynch, the New York-based investment bank. The Merrill Lynch acquisition followed closely on the heels of the failure of Lehman Brothers, another storied investment bank.

Bank of America is the second largest commercial bank according to the Fortune 500 ranking. Earlier this year, American Banker awarded Bank of America President and CEO Ken Lewis the Banker of the Year award. Some have argued that the 2008 purchases have catapulted Charlotte, NC to a new financial center in the U.S. even with the purchase of the other Charlotte-based banking giant Wachovia by Wells Fargo.

►Lobbying reports (if any)

►Political Contributions

Center for Responsive Politics  (Last Accessed 11/25/08).

Merrill Lynch

Merrill Lynch was one of the few remaining investment banks before it agreed to be acquired by Bank of America in September. Merrill Lynch received $10 billion from the Treasury Department’s Capital Purchase Program (CPP) while its new parent, Bank of America, obtained $15 billion from the same program.

Merrill Lynch was first formed as Charles E. Merrill and Co. in 1914, but quickly became Merrill Lynch in 1915 with the addition of Edmund C. Lynch.  Merrill Lynch grew throughout the 20^th century with a variety of mergers and acquisitions. Charles Merrill died in 1956 at the age of 70, and in 1998 was named by CBS and Time as one of the “People of the Century: 20 Who Changed Our Lives.”

The firm’s logo is a bull and its long-time motto is that they are “Bullish on America.” The company is rated 40 on the Fortune 500 and the “Thundering Herd” (the nickname for the employees) are in 40 foreign markets across the globe.

While Merrill Lynch was a relative late-comer to the world of exotic mortgage backed securities, the company made up for lost time in the mid-2000s, including the 2006 $1.6 billion acquisition of First Franklin, a lender heavily into risky mortgages. By 2007, Merrill Lynch was the leader in synthetic CDOs (collateralized debt obligations and credit default swaps) that were backed by mortgages and hedges against defaults, these are high risk, high return investments.

When the property market tanked, Merrill Lynch President and CEO Stanley O’Neal was forced out and John Thain, former head of the New York Stock Exchange, was brought on board. As the depth of economic crisis became more dire, Merrill Lynch tried to offload their bad paper, selling some for as little as 22 cents on the dollar. In September 2008, LehmaBrothersn , another storied investment bank, collapsed under its debt. Thain quickly saw the writing on the wall and within 24 hours, Merrill Lynch was sold to Bank of America for $50 billion.

►Federal contracts

USAspending.gov (last accessed 03/26/2009)

►Lobbying reports (if any)

►Political Contributions

Center for Responsive Politics  (Last Accessed 11/25/08).

 Last Updated March 26, 2009