I would like to respond to the letter (May 27) regarding my public awareness effort to inform consumers about a recent landmark case involving the controller's office and Bank of America.
In 1975, my predecessor sued 15 banks for the illegal practice of service charging inactive accounts and ceasing to pay interest on those which were interest-bearing. Fourteen banks settled; only Bank of America insisted on going to trial.
After an extensive trial and subsequent appeal by Bank of America, at a cost of nearly $2 million to taxpayers, the courts ruled that the bank was engaged in "unlawful activity" for, among other things, service charging nearly 700,000 schoolchildren's savings accounts out of existence.
During the trial it became clear that the bank had encouraged children to deposit their nickels and dimes every week, starting in the early 1940s. After the children stopped making deposits, however, the bank, without notice, service charged those accounts $1 per month. In a relatively short time, the bank wiped out nearly all of the 700,000 accounts.