Hugh’s Dream Crumbles


mccoll-bankingYesterday at a few minutes before 6:00 pm, Hugh McColl’s former nationwide bank dream empire suffered yet another humbling blow. Bank of America shareholders stripped Kenneth D. Lewis of his Chairman’s title. What many consider a prelude to being shown the door, they appointed former Morehouse College President Walter E. Massey as Chairman. While Lewis keeps his titles President and Chief Executive, the bank ‘too big to fail’ suffered another humbling hit. 

It was not always so.

We’re no longer in Charlotte Toto!  
In the 1980s, McColl, the height challenged banking giant was CEO of NCNB (North Carolina National Bank). A banking pioneer in the truest sense, he had a dream to build the USA’s 1st truly national bank. Over the next 16-years through an almost Napoleanic mission of conquest and acquisition, he built a global banking powerhouse that now teeters on the brink of collapse and is the poster child (along with the former National City Bank of New York – now called Citigroup) for banking excess, greed and sheer stupidity in creating the current economic crisis.

Born in Bennettsville, SC, he actually became a banker by default rather than design. His family was filled with bankers with his father and grandfather running banks. His father, a man of great honour and pride, liquidated the family business in 1935 during the Depression and paid off all depositors. 

After a two-year military career McColl wanted to follow a different path but Dad steered him into become a trainee at the American Commercial Bank in Charlotte. A merger with Greensboro’s Security National Bank followed and in 13 short years, McColl had risen from bank officer to president of the renamed North Carolina National Bank. It was a significant presence in North Carolina and when he was named CEO in 1982 it was off to the expansion races with cross town rivals 1st Union Bank which began in 1908 in the lobby of the Buford Hotel. 

Both companies would build competing gleaming towers and empires and, along with Atlanta based Wachovia, enter a pitched “The South Will Rise Again!” battle for domination of the US banking market. Having seen his father struggle, he was determined to chart a much different course.

McColl was a systems and process guy with big dreams and an even bigger temper. Known to fire executives for not answering his calls (like The A Team’s Mr. T said, “I pity the fool” whose phone went to voicemail when Hugh called!) by the time he swallowed MBNA in Baltimore, it was done with the surgical efficiency of an FDIC/Comptroller of the currency bank takeover. Close on Friday, the merger team arrives, fires non-essential employees, takes control and the bank re-open on Monday with all systems saying NCNB, then Nationsbank and finally with the acquisition of CA based Bank of America, keeping that name as the true national holding company he coveted. 

Storied institutions were no match for him as many a mighty name fell: St. Louis’ Boatman Bancshares, Barnett Bank of Florida, Dallas’ 1st Republic (already in receivership), C&S/Sovran… like dominos mighty names fell before the magic wand of and financial riches promised under Hugh McColl’s vision.

By 1998, his empire was impressive as the powerhouse grew from his original 28,000 employees and 172 branches in North Carolina to a massive $570 billion dollar asset institution with almost 5,000 branch offices in 22 states. McColl, though was not done. Even though he would retire in 2001 BofA had its eye on other prizes.

Some say they should have stopped there but Wall Street still looked down its nose at them and McColl would not stop with Yankee prizes deliciously close on the table. Imagine a southern banker holding the trophy of The First National Bank of Boston, the national bank with the country’s oldest charter (1784). No matter it had already been acquired by Shawmut (which did the politically correct thing changing its Massasoit Indian name to FleetBoston) these southern banker would forever cement their legacy by showing those Yankees how to run a bank.

And had they even stopped there it might have been big enough to thrive and survive but the hubris of becoming number one led to three more acquisitions that proved the proverbial “Bridge too Far”… New York Trust, Countrywide (Mortgage) Financial and, of course, Merrill Lynch. 

The last four pushed them into too big to fail territory. At almost $3 trillion dollars in asset size, you can see how the $50 billion dollars in taxpayer bailout funds would not even keep its 171,587 employees in Snuggies.

So, as with the AIG bonuses the shareholders now think they have exacted their pound of flesh. Only one question remains, how’s a college president going to steer let alone run this thing?

Hugh McColl cannot be pleased.

Denis G Campbell View more

Denis G Campbell
Denis G. Campbell is founder and editor of UK Progressive magazine and co-host of The Three Muckrakers podcast. He is the author of 7 books and provides Americas, EU and Middle Eastern commentary to the BBC, itv, Al Jazeera English, CNN, CRI, MSNBC and others. He is CEO of Monknash Media and a principal with B2E Consulting in London. You can follow him on Twitter @UKProgressive and on Facebook.

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