It looks like Bank of America didn’t learn from Wal-Mart’s mistakes.

Just like Wal-Mart has done in years past, BOA is now taking out life insurance policies on it employees and listing itself as the primary beneficiary in order to fund executive compensation. According to an article in today’s Wall Street Journal:

The insurance policies essentially are informal pension funds for executives: Companies deposit money into the contracts, which are like big, nondeductible IRAs, and allocate the cash among investments that grow tax-free. Over time, employers receive tax-free death benefits when employees, former employees and retirees die.

Known as “dead peasant” insurance, Wal-Mart took out Corporate-Owned Life insurance (COLI) policies on unsuspecting employees until 1995. Even thought Wal-Mart stopped taking out new policies at this time, it continued to cash in on them years later. In Texas and Oklahoma, Wal-Mart paid $15 million to settle claims it did not have an insurable interest while taking out these policies. Michael D. Myers, an attorney who has represented workers on these types of cases, had this say about employers using these policies in a July 2007 Tampa Tribune article:

Creepy’s a good word for it...If you ask the executives that decided to buy these policies and the insurance companies that sold them, they would say this was designed to create tax benefits for the company, which would use the benefits for benevolent purposes such as buying employee medical benefits.

Despite widespread condemnation and lawsuits surrounding the practice, some companies never learn. Bank of America—in perpetual hot water for its roll in the financial crisis—decided it was a good idea to cash in on some of the $400 billion in death benefits consultants believe banks will get over the next few decades.

Many people feel that companies should not profit off the death of its employees. Nevertheless, government intervention and regulation has been slow to occur:

Efforts to rein in the practice largely have been unsuccessful, including the most recent rules Congress enacted in 2006. The rules limit companies to buying life insurance to just the top third of earners, who must provide consent. But the rules don’t apply to life-insurance that employers bought before the August 2006 rules, which cover millions of current and former employees. (WSJ)

With executive compensation out of control, Bank of America should rethink taking out these policies. Not only for the positive press, but to restore a good faith relationship with its employees - who are not doing as well as the executives.

Banks Use Life Insurance to Fund Bonuses [Wall Street Journal]:

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Our wallets are getting sore these days. After billions already in taxpayer handouts, it turns out that Bank of America executives will need another $34 billion dollars from us.

Do they deserve it? Are they grateful for the billions they’ve already received? Are they trying to use the money judiciously?  Not unless you count corporate jets and bloated executive salaries as responsible spending.

Bad corporate behavior by Bank of America is nothing new. They have a long history of doing things that put America at risk.

So with everything we know about Bank of America, it seems like Americans should be wary of letting a company like Wal-Mart anywhere near financial services.  Everyone knows of Wal-Mart has a long history of putting its own interests ahead of anyone else.  We know Wal-Mart doesn’t pay its taxes, it steals time from its workers by violating simple laws like lunch breaks, and it sells unsafe products that hurt or even kill people.  So how can we trust it with a bank?

A couple years ago, Americans decided they couldn’t and thousands wrote the FDIC to petition the agency to block a Wal-Mart bank application.  But since then, Wal-Mart has been trying to edge their way back into the money game through the back door.

Over the last few years, Wal-Mart has developed an interest in providing alternative financial services - including check cashing, general purpose prepaid cards, money order purchase and bill payment - to unbanked and underbanked consumers. Among regular check cashing store customers, 92% shop at Wal-Mart at least once per three-month period. Still, less than half of the surveyed population cash checks at Wal-Mart stores, with most preferring traditional check cashing centers due to a perceived convenience.  Wal-Mart sees this potential to expand their business.

‘Alternative’ financial services are a lucrative market these days; a study by First Data, a financial transaction technology company, found that 78 million Americans either use no financial services, or are underserved. Given that many of these customers are lower-income and many shop at Wal-Mart, it’s no wonder the retailer sees an opportunity.

Another report from Aite Group, an industry research and advisory firm, puts Wal-Mart’s current market share of ‘alternative’ financial services at 11%. Some analysts, including Seeking Alpha, claim that the retailer has distinct advantages in offering financial services: in-store convenience, and potentially lower costs than check-cashing or money wiring businesses.

Right now is a time for better, more accountable banks. Not Wal-Mart banks.

Our wallets are getting sore these days. After billions already in taxpayer handouts, it turns out that Bank of America executives will need another”>another $34 billion dollars from us.

Do they deserve it? Are they grateful for the billions they’ve already received? Are they trying to use the money judiciously?  Not unless you count corporate jets and bloated executive salaries as responsible spending.

Bad corporate behavior by Bank of America is nothing new. They have a long history of doing things that put America at risk.

Given Bank of America’s behavior, Americans should be wary of letting a company like Wal-Mart anywhere near financial services.  And a couple years ago, Americans did just that when thousands wrote the FDIC to petition the agency to block a Wal-Mart bank application.  But since then, Wal-Mart has been trying to edge their way back into the money game through the back door.

Over the last few years, Wal-Mart has developed an interest in providing alternative financial services - including check cashing, general purpose prepaid cards, money order purchase and bill payment - to unbanked and underbanked consumers. Among regular check cashing store customers, 92% shop at Wal-Mart at least once per three-month period. Still, less than half of the surveyed population cash checks at Wal-Mart stores, with most preferring traditional check cashing centers due to a perceived convenience.  Wal-Mart sees this potential to expand their business.

‘Alternative’ financial services are a lucrative market these days; a study by First Data, a financial transaction technology company, found that 78 million Americans either use no financial services, or are underserved. Given that many of these customers are lower-income and many shop at Wal-Mart, it’s no wonder the retailer sees an opportunity.

Another report from Aite Group, an industry research and advisory firm, puts Wal-Mart’s current market share of ‘alternative’ financial services at 11%. Some analysts, including Seeking Alpha, claim that the retailer has distinct advantages in offering financial services: in-store convenience, and potentially lower costs than check-cashing or money wiring businesses.

In Mexico, Wal-Mart already offers credit cards—but at shameful rates. The retailer charges a whopping 69.6% annual interest rate for its card. And Wal-Mart has been fiercely lobbying the Mexican legislature to secure changes to banking laws that would allow it to offer all manner of financial services in-store.

But the U.S. and Mexico aren’t enough for Wal-Mart. Now it’s taking a shot at Chile “through the D&S grocer it recently acquired”, according to the Wall Street Journal. We’ve all seen how a lack of adequate regulation, combined with banks’ dabbles into unfamiliar areas (such as mortgage-backed securities) brought the world economy to the brink of collapse. A ‘Bank of Wal-Mart’ would only serve to perpetuate this sort of risk.

Right now is a time for better, more accountable banks. Not Wal-Mart banks.

It’s been no secret that big corporate interests like Wal-Mart, Bank of America and AIG have been spending big bucks and lining up to fight the Employee Free Choice Act.

But the Huffington Post just turned up the audio from a conference call hosted by Bank of America - three days after taking $25 billion in bailout money - with business execs and conservative activists on how to fight the Employee Free Choice Act.

So, here’s venturing a thought: it’s one thing to fight EFCA and unions, but another to take $25 billion in taxpayer money - meant to save the economy - and turn around three days later to host a conference call where speakers are referring to to possibility of raising wages and benefits as “the demise of civilization.”

No word on whether or not the suspected Wal-Mart-funded Workplace Fairness Institute was on the call, but the Center for Union Facts was - and their anti-labor agendas are basically identical.

We’ll keep you posted…