Regulators have reportedly warned lending giant Bank of America (NYSE:BAC) to get stronger if it wants to avoid being slapped with a public enforcement action.
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According to The Wall Street Journal, Charlotte-based BofA has been operating under a nonpublic memorandum of understanding since May 2009 that identified governance, risk and liquidity management as problem areas.
Regulators have recently told BofA’s board they are not satisfied with the progress in these areas and threatened a formal public action that would increase pressure on the lender, the paper reported.
While the board believes BofA, the No. 2 U.S. bank by assets to JPMorgan Chase (NYSE:JPM), has met demands from the 2009 MOU, regulators are concerned about turnover at the company’s management positions, the Journal reported.
It’s still possible regulators could lift the existing penalty – a major priority of BofA CEO Brian Moynihan, the paper reported.
BofA’s stock, which has plunged nearly 60% year-to-date, had little response to the news. Shares of BofA slipped 0.4% to $5.48 Tuesday morning.