Bank of America has had trouble swallowing some of its past merger targets, with negative results for its customers, but analysts and consumer advocates yesterday said the proposed acquisition of FleetBoston Financial could go down easier.There will be no forced divestitures or consolidation of branches here in New England, as there were following Fleet's purchase of BankBoston in 1999, and the two banks have account and fee structures that are somewhat similar.
"I wouldn't expect service to get worse over the long run, and I think there's some reason to believe it will get better," said Robert Krughoff, president of Consumers' Checkbook, a Washington-based nonprofit that analyzes consumer services.
In its most recent Boston publication, Consumers' Checkbook said FleetBoston earned the lowest marks of any of the 120 local banks and credit unions, with only 10 percent of consumers surveyed rating the bank superior on overall service. Bank of America, based in Charlotte, N.C., fared better in the publication's ratings, with 26 percent of those surveyed in San Francisco rating the bank's service superior. In Chicago, the figure was 46 percent.
Bank of America officials said yesterday that no decision would be announced on how Fleet's account structure would be changed until the third quarter of next year.Chad Gifford, chairman and chief executive of Fleet who is slated to become chairman of Bank of America after the purchase is completed, said this merger will be like "night and day" compared to Fleet's acquisition of BankBoston in 1999.
"With Fleet-BankBoston, we took BankBoston customers and gave them inferior products from the old Fleet," he said. "In this case, Bank of America's products and technologies are the best in the country. So this is going to be very, very different."
Fleet's interest rates for money market accounts, CDs, and home equity loans are slightly better than those offered by Bank of America, according to data from Bankrate.com. Bank of America offers fewer types of checking accounts than Fleet and its fees tend to be higher, but it offers online bill payment for free with all its accounts while Fleet charges most of its account holders $4.50 a month for the service.
Fleet customers interviewed yesterday at a branch on Gallivan Boulevard in Dorchester said they were used to the acquisition drill, having been passed from one bank to another over the last decade as the industry has consolidated. The customers said they were girding for glitches, but hopeful the problems wouldn't be too severe.
Frank Fay of Dorchester, a veteran of several bank consolidations, said one bank is pretty much like another nowadays. "Who cares what the sign says?" he said.
Judy LeFort of Quincy was more pessimistic. "It's giving the consumer less and less options," she said of the megamergers. "I want to bank with my hometown bank. I don't want to bank with a bank in another state."
Bank of America has had trouble digesting mergers in the past. In 1997, Bank of America - then known as NationsBank - bought Barnett Banks, one of the largest and oldest financial institutions in Florida. It angered consumers by raising fees, hiking loan rates, and offering poorer service.
Eloise Hall, a spokeswoman for Bank of America, acknowledged problems have occurred with past mergers but said they will be minimized with the Fleet acquisition because officials at the two banks share similar values and commitments to their communities.
"The Barnett merger was a difficult merger, but we have definitely learned our lesson," Hall said.
Bruce Dorpalen, director of housing counseling for ACORN Housing Corporation in Philadelphia, which works with residents of low and very low-income neighborhoods, said his group is normally of the opinion that bigger is not necessarily better. But he said Bank of America has an unusually strong record in making mortgage loans to low-income consumers.
"If Fleet has to be purchased, Bank of American is the bank to do it," he said. "This is probably the best match there is."
Bruce Marks, chief executive of the Neighborhood Assistance Corp. of America, who has crossed swords with Fleet repeatedly over the years, said it is a shame New England's largest bank is being sold. He blamed Fleet executives for failing to pay attention to customer service until it was too late.
But Marks said New England consumers may come out ahead with the merger, drawing a parallel to NationsBank's acquisition of Bank of America in 1991.
"Consumers have benefited out in California and I believe the same thing will happen in New England," he said. "This is as good as the New England consumer can get." SIDEBAR 1: RATE MATCHUP PLEASE REFER TO MICROFILM FOR CHART DATA. SIDEBAR 2: CHECKING ACCOUNTS PLEASE REFER TO MICROFILM FOR CHART DATA.
Bruce Mohl can be reached at mohl@globe.com.
