Learn more about our policy experts.

Media Contacts

Angela Bradbery, Director of Communications
w. (202) 588-7741
c. (202) 503-6768
abradbery@citizen.org, Twitter

Don Owens, Deputy Director of Communications
w. (202) 588-7767

Karilyn Gower, Press Officer
w. (202) 588-7779

David Rosen, Press Officer, Regulatory Affairs
w. (202) 588-7742

Other Important Links

Press Release Database
Citizen Vox blog
Texas Vox blog
Consumer Law and Policy blog
Energy Vox blog
Eyes on Trade blog

Follow us on Twitter


Jan. 25, 2012  

Public Citizen to Financial Regulators: Bank of America Poses a Grave Threat to U.S. Financial Stability, Should Be Broken Up

Petition Calls on the Federal Reserve and Financial Stability Oversight Council to Reform Banking Behemoth, Create Smaller, Simpler and Safer Institutions to Guard Against Financial Crisis

WASHINGTON, D.C. – Bank of America, the second-largest bank holding company in the U.S., should be broken up and reformed, Public Citizen said in a petition sent today to the Federal Reserve and the Financial Stability Oversight Council.

Public Citizen also sent a separate letter to financial regulators co-signed by 19 individuals, including economists and legal scholars, and by Americans for Financial Reform, Center for Media and Democracy, Demos, National People’s Action, Neighborhood Economic Development Advocacy Project, New Bottom Line, SAFER and U.S. Public Interest Research Group. The letter calls on regulators to investigate any threats posed by Bank of America or other large and complex financial institutions commonly known as “too big to fail” and to take all actions necessary to safeguard financial stability.

Public Citizen’s petition calls on regulators to use authority granted by section 121 of the Dodd-Frank Wall Street Reform and Consumer Protection Act to reform Bank of America into a set of smaller, simpler and safer institutions.

Bank of America, which holds assets equal to roughly one-seventh of the country’s gross domestic product, is too large and complex to manage or regulate properly, the petition said. Moreover, its financial condition is poor and could deteriorate rapidly.

Near- and long-term financial indicators demonstrate the market’s unease with Bank of America and show that the bank is becoming increasingly unstable. In addition, Bank of America likely is undercapitalized, as it faces potential liabilities and market risks that could severely destabilize it.These liabilities could arise from the bank’s ongoing litigation and from exposure to financial instability in Europe.

An ongoing study by the Volatility Institute at New York University’s Stern School of Business confirms the danger posed by the bank: When looking at financial institutions’ contributions to systemic risk, Bank of America ranks first among U.S. financial institutions. The analysis shows not only that Bank of America is highly susceptible to financial crises, but also that it could “create or extend” a crisis.

“The bank poses a ‘grave threat’ to U.S. financial stability by any reasonable definition of the phrase,” said David Arkush, director of Public Citizen’s Congress Watch division. “If Bank of America in its current form were to fail, it would devastate the financial system. We’re asking the regulators to make sure that never happens. The only way to be sure is to reform the institution into something safer before any crisis materializes.”

 The Federal Reserve and the Financial Stability Oversight Council should use section 121 of the Dodd-Frank Act – which gives the Fed the ability to mitigate the “grave threat” that a financial institution poses by limiting banks’ activities or forcing it to divest assets – to break Bank of America into separate institutions. If crafted properly, these smaller institutions would be less likely to fail, would not endanger the U.S. financial system in the event of failure and would be easier to liquidate in an orderly fashion should it become necessary, the petition said.

“The time to use section 121 is well in advance of a crisis,” said Micah Hauptman, Public Citizen’s financial campaign coordinator. “In the case of Bank of America, that means now.”


Public Citizen is a national, nonprofit consumer advocacy organization based in Washington, D.C. For more information, please visit www.citizen.org.

Copyright © 2016 Public Citizen. Some rights reserved. Non-commercial use of text and images in which Public Citizen holds the copyright is permitted, with attribution, under the terms and conditions of a Creative Commons License. This Web site is shared by Public Citizen Inc. and Public Citizen Foundation. Learn More about the distinction between these two components of Public Citizen.

Public Citizen, Inc. and Public Citizen Foundation


You can support the fight for greater government and corporate accountability through a donation to either Public Citizen, Inc., or Public Citizen Foundation, Inc.

Public Citizen lobbies Congress and federal agencies to advance Public Citizen’s mission of advancing government and corporate accountability. When you make a contribution to Public Citizen, you become a member of Public Citizen, showing your support and entitling you to benefits such as Public Citizen News. Contributions to Public Citizen are not tax-deductible.

Public Citizen Foundation focuses on research, public education, and litigation in support of our mission. By law, the Foundation can engage in only very limited lobbying. Contributions to Public Citizen Foundation are tax-deductible.