A coalition of community reinvestment, labor, and religious organizations was announced Wednesday, August 22 during the release of a study predicting substantial job loss and a decline in tax revenue as a result of the acquisition of LaSalle Bank by Bank of America. The coalition, convened by SEIU Local 1, is asking for a firm commitment from Bank of America to protect local jobs, increase lending presence in minority communities and invest in local communities. Citing a similar takeover in 2004 of Bostons Fleet Bank when a community coalition successfully ensured Bank of America altered merger plans to preserve thousands of local jobs, area community leaders are calling on the nations largest bank to do the same for Chicago.
The press conference also announced the release of a new report by Anderson Consulting Group, entitled Economic and Fiscal Impact of LaSalle Bank Acquisition, which estimated that more than 10,500 Chicago jobs are expected to disappear in just two years if Bank of America follows through with promised cuts of 50% of LaSalle Banks costs. More than 6,000 jobs alone will likely be lost from companies other than LaSalle due to a spillover effect to other area businesses resulting from the merger. The bank is expected to cut virtually all Chicago jobs from LaSalles headquartersoverwhelmingly high wage jobs with an average annual salary of $91,000 a yearand the few jobs retained will likely be moved to Bank of America headquarters in Charlotte, North Carolina, according to the report. Meanwhile, the report shows the financial services industry is not adding many jobs, indicating Chicago will be unlikely to absorb such a large number of laid-off LaSalle employees.
The study also predicts job losses from the impending merger of locally-based LaSalle Bank with Americas largest bank would drain more than $780 million from Chicagos economy during the same time period. Local governments will lose more than $17 million in taxes paid by individuals while the state of Illinois will lose more than $32 million in similar taxes over two years as a direct result of the expected job cuts. In addition, although the report did not estimate the impact due to lost revenue from business taxes, further public revenue loss could be expected.
Bank of America is the largest bank in the United States, controlling one in five credit cards and ten percent of all bank depositsthe maximum amount permitted by the Federal Reserve. Recently Bank of America has come under fire for its record of charging consumers some of the highest fees and interest rates in the nation.