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Tess Vigeland: Customers of Countrywide Financial are probably scratching their heads these days, wondering what happens now that Bank of America is buying out the troubled mortgage lender.

No doubt there’ve been some sighs of relief — a buyout is always better than a bankruptcy, which was rumored for months at Countrywide — but what about the practical stuff? What changes?

Jane D’Arista is with the research group Financial Markets Center.

Vigeland: Jane, what’s normal in these situations?

Jane D’Arista: For the consumer, usually it is absolutely no change. I mean, you might get a change of name or checkbook, but in good times, that’s about as far as it goes. These are not good times and therefore, consumer beware. Read the fine print when they change your credit card, be certain you know what you’re signing on to when you take a loan. I mean, a lot of the people who had mortgages out from Countrywide did not know some of the details of those loans. We just passed a very terrible period for consumers, because unless you were really with your magnifying glass, bad things could have happened to you.

Vigeland: What about your mortgage interest rate, the rate you’re getting on a CD, the fees on a bank account. Would those potentially change?

D’Arista: Yes, all of those can change. Very often in the agreements that you’re sent on credit cards, for example, they will tell you they can change the interest rate without notice or the terms without notice.

Vigeland: I remember back in the mid-90’s there were a whole lot of bank takeovers and I wonder if there was any research done on whether consumers profit when a smaller bank is taken over by a bigger one?

D’Arista: Well, they may profit in terms of convenience. The larger bank may have more branches and more ATMs and things of this sort. My concern at this point is concentration. It makes it a lot easier for a bank to set terms that are really at variance with the needs of a community when they are the only large or dominant institution in an area. At the moment, I’m very concerned about small businesses. Many owners of small businesses were persuaded to take out larger amounts of mortgage or equity loans on their residences rather than apply for small business loans. It’s a lot easier for the banking institution to sell on a mortgage and get it off its books, whereas it has to keep the small business loan on its books. We’ve seen the impact of all these foreclosures on communities. My concern is that’s only the first step. The second one will be the effect on small businesses in communities.

Vigeland: But in general, for the time being, customers of Countrywide won’t see a huge difference and there aren’t necessarily risks that will go along for them of this takeover?

D’Arista: I think that’s right. The average depositor in Countrywide is going to be OK for a time being. If they already have a mortgage out there, it’s not going to be a problem if they know the terms. They won’t be able to do home equity loans, they won’t be able to go back and refinance their mortgages for quite a while.

Vigeland: Jane D’Arista is an economic analyst with Financial Markets Center and she joined us from Connecticut. Thanks so much for your time.

D’Arista: My pleasure.

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