Under New Ownership: Bank Of America

CEO Of The Nation's Largest Bank Talks About The Treasury Department's Plans For Buying Into Financial Firms

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"But why isn't it Socialism, if the government starts owning our banks?" Stahl asked.

"That will not last forever; we will pay off the preferred stock at some point, and come back to not being owned partially by the government."

"Can you give us what your sense of how long it's going to take?"

"Yeah, I think somewhere between 3 and 5 years, we'll pay it off," he said. "And then you go back to, more toward Capitalism."

"It's said that one of the main reasons the [Bank of America] is doing well is because of your decision not to get into sub prime mortgages," Stahl said.

"In 2001, my first year as CEO, we decided that we just didn't like the business. It was too risky. And so we decided to get out of it."

He makes it sound like a routine decision, but getting out of most of the financial products that brought Wall Street crashing down was significant. And now Lewis runs one of the country's healthiest banks, which just keeps growing.

"We saw the strongest growth in deposits in the 3rd quarter we'd ever seen in our history," he said.

He told us that during this crisis, people are taking their money out of other banks and putting it in his.

"We bank every other American family, you know, in America," Lewis said, with Bank of America doing business with half of all families in the U.S. covering via credit cards, auto loans, deposits and checking accounts.

The way B of A accomplished this was by buying the number one company in virtually every category of banking.

For instance, it bought Countrywide in mortgages, and MBNA in credit cards. Now it's a nearly $3 trillion dollar conglomerate, the WalMart of banking.

And the biggest bank in America is headquartered not on Wall Street, but 600 miles south, in Charlotte.

"Some people don't even know what state Charlotte's in, whether it's North or South Carolina," Stahl said. "Am I insulting you?"

"No, in fact, I always say 'Charlotte, North Carolina, just so they don't have to ask the question!" Lewis laughed.

Not surprisingly, B of A seems to own Charlotte - and the town grew with the bank.

B of A started out as a relatively small, regional bank.

"Well, we didn't like being small," Hugh McColl (who was the bank's CEO before Lewis) told Stahl. "I mean, there's nothing really attractive about being small."

McColl set out to expand the bank's reach from coast to coast and make Charlotte a financial powerhouse.

"I think we have this sort of Southern underdog of wanting to be masters of our own fate, and not be dependent on northern capital," he said.

"When you were growing, and you'd go to New York, did they not treat you well?" Stahl asked. "Did they treat you like, sort of, the country bumpkins?"

"I guess when I was a young man, I always felt a little uncomfortable in New York," McColl said.

"This uncomfortable feeling - that they weren't respecting you - did you have it in your head, 'I'm going to conquer New York'?"

"Well, that would overstate New York; I was more interested in America," McColl replied.

"Did you really think that you could overtake Wall Street?" Stahl asked.

"Well, have you ever played tennis? Once you size up the competition and decide whether you can beat 'em or not, hey - I thought I could."

And they did.

The crowning victory came last month when Wall Street's most famous investment houses were collapsing under the weight of their toxic portfolios and needed rescuing. They went hat-in-hand … to Charlotte, North Carolina.

"Everybody thought you were going to buy Lehman Brothers," Stahl recounted to Lewis. "Friday night, that was the buzz. Monday morning, it's not Lehman Brothers, it's Merrill Lynch. What happened between Friday night and Monday morning?"

"I had talked to Secretary Paulson that Friday,' Lewis said. "And basically said we didn't think we could do the deal without government assistance."

"With Lehman."

"With Lehman. That we couldn't do it without some help. And then about 10:30, John Thain called."

It was Saturday morning, September 13. John Thain, the CEO of Merrill Lynch, was on the line. Lehman was on its death bed; Merrill Lynch was said to be next.

"You always wanted Merrill Lynch," Stahl said.

"We've always thought that was the best thing for us," Lewis said.

"You were drooling for Merrill Lynch," she said.

"We have always felt it was."