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FIRST ON CNBC: CNBC TRANSCRIPT: BRIAN MOYNIHAN, BANK OF AMERICA CEO, ON CNBC'S "SQUAWK BOX" TODAY

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WHEN: TODAY, FRIDAY, JULY 16TH AT 7:00AM ET

WHERE: CNBC'S "SQUAWK BOX"

Following is the unofficial transcript of a FIRST ON CNBC interview with Bank of America CEO, Brian Moynihan, today on CNBC's "Squawk Box" at 7AM ET.

All references must be sourced to CNBC.

BECKY QUICK, ANCHOR: JOINING US RIGHT NOW FOR A FIRST ON CNBC IS BANK OF AMERICA'S CEO AND PRESIDENT BRIAN MOYNIHAN. BRIAN, THANK YOU FOR YOUR TIME THIS MORNING.

BRIAN MOYNIHAN: A PLEASURE TO BE HERE. THANK YOU, BECKY.

QUICK: GOING TO THE NUMBERS, THE KNEE-JERK REACTION FROM THE STREET HAS SHOWN THAT THE BID-ASK IS STRADLING WHERE THE CLOSE WAS YESTERDAY. THE NUMBERS CAME IN WHERE PEOPLE HAD BEEN EXPECTING, LOOKS LIKE DECENT NUMBERS. YOU ARE SAYING IN YOUR COMMENTS YOU ARE SEEING SOME IMPROVEMENT ACROSS THE MANY OF THE LINES YOU'RE WATCHING.

MOYNIHAN: IF YOU LOOK AT OUR CUSTOMERS, YOU SEE STABILIZATION IN THE FIRST HALF OF THE YEAR, SOME IMPROVEMENT IN AREAS. THIS QUARTER VERSUS LAST QUARTER, THE CAPITAL MARKETS HAD A COMPLETE SLOWDOWN AND THAT AFFECTED US AS IT DID AFFECT SOME OF OUR PEERS, BUT OVERALL, WHEN YOU LOOK AT THE UNWANTED ECONOMY, WE PREDICTED OVERALL 2.5% TO 2.7%. AND THE U.S. ECONOMY AND WE'RE GOING TO REFLECT THAT. WE FEEL EVERYTHING IS SOLID RIGHT NOW. THERE'S NOISE THIS QUARTER BECAUSE OF THE CHANGES IN THE CAPITAL MARKETS.

QUICK: WE LOOK AT BANK OF AMERICA, WE'RE VERY INTERESTED IN YOUR NUMBERS, NOT ONLY WHAT IT MEANS FOR THE BANK OF AMERICA BUT WHAT IT MEANS FOR THE BROADER ECONOMY. YOU MENTIONED YOU SEE 2.5% TO 2.7% IN THE GROWTH FOR THE ECONOMY, A BETTER IDEA OF WHAT'S HAPPENING IN THE ECONOMY THAN JUST ABOUT ANYBODY ELSE. I BELIEVE ONE OUT OF EVERY TWO AMERICANS DOES SOME FORM OF BANKING WITH YOU. WHERE DO YOU SEE THE STRENGTH AND WHERE DO YOU SEE THE WEAKNESSES WHEN IT COMES TO THE CONSUMER?

MOYNIHAN: WELL I THINK THAT ON THE CONSUMER SIDE, WE'VE SEEN SINCE I’D SAY THE MIDDLE OF LAST YEAR THAT THEY STARTED SPENDING MORE AND WE ARE SEEING THAT CONTINUE. AS WE LOOK OUT FORWARD, OUR PROJECTIONS WOULD BE THAT THE INCREASE YEAR OVER YEAR WILL START TO SLOW DOWN DUE TO THE FACT THAT LAST YEAR'S SECOND HALF WAS STRONGER.I THINK THEY'RE SOLID. AND I THINK WE ARE SEEING DELINQUENCIES ARE COMING DOWN ON THE CREDIT SIDE. AND WE'RE SEEING THE CONSUMER CONTINUE TO SPEND. EVERYBODY, I THINK, IS A LITTLE MORE NERVOUS THIS MONTH THAN THEY WERE A MONTH OR TWO AGO DUE TO SOME OFTHE MACRO FACTORS. SO FAR, IT'S HELD UP OKAY I’D SAY.

QUICK: DO YOU THINK THE MACROFACTORS ARE MORE TIED TO THE CONCERNS THAT WE'VE SEEN COMING OUT OF EUROPE AND GREECE? OR IS THIS SOMETHING WITH THE UNEMPLOYMENT NUMBERS AND JUST GENERAL DROP IN CONSUMER SENTIMENT?

MOYNIHAN: IT'S ALL THAT, BECKY. IF YOU READ THE HEADLINES AND UNEMPLOYMENT IS STAYING HIGH AND WE THINK UNEMPLOYMENT IS PRETTY STICKY. IF YOU READ THE HEADLINES AND YOU'RE A PERSON TO READ THE HEADLINES ABOUT EUROPE, THERE'S UNCERTAINTY IN A LOT OF WAYS. SO THAT CAUSES PEOPLE TO PUT OFF THINGS. AS YOU'RE SEEING IN THE BUSINESS SIDE ESPECIALLY AS OPPOSED TO THE CONSUMER SIDE, BUSINESSES HAVE HAD STRONG CASH FLOWS, STRONG PROFITS, BUT THE HIRING HAS BEEN SLOW AND THE INVESTMENT HAS BEEN SLOW AND THE DEMAND TO BORROW HAS ACTUALLY BEEN SLOW. SO OUR LOANS ARE BUMPING ALONG. IT WILL TAKE A FEW MORE QUARTERS UNTIL PEOPLE FEEL CONFIDENT ENOUGH TO PUT THE CAPITAL TO WORK IN THIS COUNTRY AND IN TO EUROPE.

ANDREW ROSS SORKIN, GUEST HOST: BRIAN, ANDREW SORKIN HERE. HOW DO YOU EXPECT FINREG TO CHANGE YOUR BUSINESS? AN INTERESTING ARTICLE IN "THE WALL STREET JOURNAL." AND I'D ALSO BE REMISSED TO NOT ASK YOU WHAT YOU MAKE OF THE GOLDMAN SACHS SETTLEMENT YESTERDAY NIGHT? LAST NIGHT.

MOYNIHAN: GOLDMAN SACHS I’D SAY THAT QUESTION WOULD BE BETTER FOR LLOYD. I DON'T KNOW THE DETAILS OF THE CASE. BUT LET'S TALK ABOUT THE FINANCIAL REGULATION AND THE DODD-FRANK BILL. YOU HAVE TO PUT THAT IN TO CONTEXT THAT THE OTHER REGULATION HAS COME IN FROM THE OVERDRAFTS, CALLED REGULATION E, ON THE CARD ACT WHICH AFFECTED THE CREDIT CARD BUSINESS. ALL IN ALL, AND I LISTENED TO SOME OF THE DIALOGUES EARLIER, THE POLICY DECISION HAS BEEN MADE TO CHANGE THE WAY THE AMERICAN CONSUMER IS GOING TO BE CHARGED AND WE'RE LEADING THOSE CHANGES. WE CHANGED THE OVERDRAFT POLICIES LAST FALL. THE CONSUMERS SEEM TO BE RESPONDING WELL TO IT AND LIKE IT. THE IDEA IS THAT-- OUR VIEW WAS IF THE CONSUMER WAS GOING TO OVERDRAFT FOR A CUP OF COFFEE AS THE PROTOTYPE STORY GOES, WE DECIDED TO STOP DOING THAT. SO WE STOPPED ALL OVERDRAFTS AND DEBIT CARDS AND WILL BE STOPPING THAT. ALL OF THAT IS GOING TO COST US REVENUE. WE WILL LAY THAT OUT FOR OUR SHAREHOLDERS A LITTLE LATER TODAY. IT'S NOT IN SIGNIFICANT AMOUNTS. WE MADE ESTIMATES. WE'LL ADOPT THE BUSINESS MODEL AS THE ARTICLE SAYS TODAY. TALKING EARLIER ABOUT TO THE REALITIES AND CHANGE THE WAY—MAYBE LESS PENALTY PRICING, BUT MORE PRICING ACROSS THE BOARD TO MAKE UP FOR IT.

QUICK: BECKY GRAYSON OF MORGAN STANLEY TELLS ME THAT SHE LOOKS AT THE BIG MONEY CENTER BANKS INCLUDING BANK OF AMERICA AND EXPECTS THAT FINREG IN COMBINATION WITH THOSE CHANGES OF THE CONSUMER CREDIT ISSUES WILL ADD UP TO A DROP OF ABOUT 11% IN POTENTIAL EARNINGS BY THE YEAR 2011. DOES THAT SOUND LIKE A RIGHT NUMBER?

MOYNIHAN: I THINK WE’VE LAID OUT THE COMPONENT PARTS BEFORE ON THE CARD ACT AND ON THE REG-E WHICH IS ABOUT $1 BILLION EACH AFTER TAX TO GIVE YOU A SENSE. SO I THINK BETSY’S NUMBERS ARE IN THE RANGE. BUT I THINK THE MITIGATING -- HOW YOU CHANGE THE BUSINESS MODEL, WE GIVE OUR CONSUMERS A LOT OF VALUE, 18,000 ATMS, 6,000 BRANCHES. 24 BY 7 CALLS. WE HAVE 5 MILLION MOBILE CUSTOMERS. WE GIVE THEM A LOT OF WAYS TO DESERVICE. AS WE SAY, THEY APPRECIATE THAT VALUE. THE QUESTION IS HOW DO WE GET THAT VALUE EXCHANGE BETWEEN US AND THE CONSUMER CORRECT AND THAT’S GOING TO TAKE SOME WORK ON OUR CONSUMER TEAM OVER THE NEXT COUPLE OF YEARS.

QUICK: BUT IS IT FAIR TO ASSUME THAT YOU’RE NOT GOING TO BE TALKING ABOUT AN 11% DROP IN EARNINGS? THAT YOU WILL FIND WAYS TO MAKE UP FOR IT?

MOYNIHAN: OVER TIME, YES. IT’S GOING TO TAKE SOME TIME TO DO THAT.RIGHT NOW, WHAT'S DRIVING OUR EARNINGS THE CREDIT COSTS COMING DOWN AND THINGS LIKE THAT. SO THIS IS A PERIOD OF TIME—A TRANSITION FROM AN ECONOMY THAT WAS IN RECESSION TO AN ECONOMY THAT’S IN RECOVERY AND FROM CREDIT BEING THE DOMINANT ISSUE TO THINGS LIKE REVENUE AND FUTURE GROWTH BEING THE DOMINANT ISSUE. WE'RE IN THE MIDDLE OF THAT TRANSITION. AS YOU WATCH IT PLAY OUT AFTER THE NEXT SEVERAL QUARTERS, IT WILL BE ABLE TO HIGHLIGH FOR PEOPLE MORE AND MORE HOW WE’RE MAKING THAT UP BUT THE TEAM IS WORKING HARD ON IT.

JOE KERNEN, ANCHOR: BRIAN, EVEN THE FED SEEMS TO NOW BE AWARE OF SOMETHING THAT HAPPENED IN MAY. IN TERMS OF CONSUMER SPENDING AND THE ECONOMY IN GENERAL. YOU WERE OUT WITH SOME COMMENTS THAT EVEN THOUGH THE CONSUMER SPENDING MORE, YOU EXPECT THE CONSUMER -- SHE -- WE SAY SHE NOW, I LEARNED THAT FROM RETAILERS, SHE WILL SLOW DOWN IN THE SECOND HALF OF THE YEAR AND THEN YOU SAY BECAUSE OF SO MUCH UNCERTAINTY. WHAT ARE YOU TALKING ABOUT?

MOYNIHAN: OH THE UNCERTAINTY IS ALL THINGS TALKED ABOUT. UNEMPLOYMENT IS STAYING HIGH. THE ABILITY TO GET CREDIT FOR CONSUMERS WHO HAVE CREDIT ISSUES IN THE LAST SEVERAL THINGS IS NOT GOING TO BE THERE. THEY'RE NOT GOING TO HAVE AS MUCH CREDIT. WE'RE BEING CONSERVATIVE, RIGHTLY SO. OUR CARD CHARGEOFFS WERE AT A VERY ELEVATED LEVEL AND THEY'VE BEEN COMING DOWN. AND WE HAVE TO BE CAREFUL WITH HOW WE GRANT CREDIT. ALL THAT FACTORS IN THE STOCK MARKET LEVELS AFFECT PEOPLE'S VIEWS AND NET WORTH. IF YOU TALK TO THE WEALTHY INVESTORS, THEY'RE HEAVY IN CASH NOW AND THEY'RE SITTING THERE BECAUSE THEY DON'T SEE THE OPPORTUNITY WITH THE CERTAINTY THEY NEED TO MAKE MONEY BY PUTTING MONEY IN THE MARKETS. IT AFFECTS EVERYBODY'S PSYCHOLOGY. IF YOU’VE LOOKED AT OVER THE MANY, MANY YEARS, WE’VE HAD SORT OF THE CONSUMER TRADING PLATFORMS WHERE CONSUMER INVESTORS—AFFLUENT CONSUMERS INVEST, YOU WILL SEE IT THE WAY THAT TRADES TEND TO CORRELATE IS TO CONFIDENCE. SO WITH ALL OF THOSE FACTORS, YOU CAN COME UP WITH FOUR OR FIVE MORE THAT ARE ON PEOPLE'S MINDS. NOW, IF YOU THINK ABOUT WHERE THEY WERE A YEAR AGO, THEY'RE MUCH BETTER OFF. STABILITY IN UNEMPLOYMENT AND IT’S GETTING SLIGHTLY BETTER IN THOSE THINGS. SO I THINK ITS BETTER THAN IT WAS A YEAR AGO, BUT THE RATE OF INCREASES HAS NOW SLOWED DOWN A LITTLE BIT BECAUSE ON HOUSING THERE'S BEEN A SERIES OF NUMBERS THAT ARE MORE DIFFICULT. SO I THINK IT'S ON PEOPLE'S MINDS.

KERNEN: DO YOU FEEL THE PUSH AND PULL OF, A, YOU’VE GOT TO LEND MORE FROM THE GOVERNMENT. YOU BETTER LEND MORE. YOU GUYS HAVE TO BE LENDING. LEND, LEND, LEND. AND THEN, TWO, YOU BETTER RESERVE -- I SAID A AND THEN TWO -- B, YOU BETTER RESERVE MORE. YOU BETTER KEEP YOUR CAPITAL HIGH, YOU BETTER LEAVE MORE—YOU KNOW, YOU BETTER NOT MAKE ANY BAD LOANS LIKE YOU DID FROM THE OLD DAYS. DO YOU FEEL THE PUSH-PULL FROM THE GOVERNMENT?

MOYNIHAN: I THINK EVERYBODY FEELS THE SAME PUSH-PULL.SO I THINK CHAIRMAN BERNANKE A WEEK OR SO AGO WAS MAKING THIS SPEECH ABOUT SMALL BUSINESS AND SAID WE NEED TO MAKE MORE SMALL BUSINESS CREDIT AVAILABLE. BUT ON THE OTHER HAND, WE CAN'T MAKE BAD LOANS. THAT IS A CONUNDRUM THE WORLD IS IN AT THESE TIMES. AND SO WE DID $172 BILLION OF CREDIT OR SO THIS QUARTER.THAT'S CONSISTENT WITH WHAT WE'VE DONE OTHER QUARTERS. WE’VE MADE A COMITTMENT TO DO 5 BILLION DOLLARS MORE TO SMALL BUSINESS THIS YEAR AND LAST YEAR AND LIVING UP TO THE COMMITMENT. IN CERTAIN INDUSTRIES AND AREAS, CREDIT IS STILL DIFFICULT. CONSTRUCTION, RETAILERS, LITTLE RETAILERS, AND RESTAURANTS AND THINGS LIKE THAT WHICH ADD A LOT OF MARGINAL ACTIVITY IN THE ECONOMY, BUT RIGHT NOW IT'S HARD TO GET CREDIT BECAUSE THE BUILD UP FOR THOSE BUSINESSES TO BE SUCCESSFUL IS IN QUESTION RIGHT NOW. AND SO AS WE LOOK AT IT, FOR A GOOD COMPANY, THAT HAS BEEN IN BUSINESS FOR A LONG TIME IT’S A MANUFACTURER, THERE’S EXTREME COMPETITION FOR THEIR LOANS AND ON THE OTHER HAND, FOR A STARTUP THAT WOULD BE A CONSUMER-DRIVEN RESTAURANT OR SOMETHING LIKE THAT, IT'S GOING TO BE HARDER TO GET CREDIT. AND THAT'S JUST WHERE WE ARE IN THE ECONOMIC CYCLE.

QUICK: DO YOU THINK THAT PUSH-PULL—THAT DYNAMIC IS GOING TO CHANGE? FINREG CREATES A NEW AGENCY, THAT CONSUMER PROTECTION AGENCY, DO YOU WORRY ABOUT THE DYNAMIC AFTER THAT POINT?

MOYNIHAN: WE’VE ALWAYS HAD A VIEW IF YOU LOOK BACK AT WHAT'S GONE ON IN VARIOUS CYCLES, INCLUDING THIS CYCLE AROUND CONSUMERS, IT'S BEEN PEOPLE FRANKLY OUTSIDE OF THE BANKING INDUSTRY THAT PUSH THE LIMITS ON WHAT THEY WOULD DO FOR THE CONSUMER AND GETTING THE CONSUMER OVEREXTENDED.THE SUB PRIME MORTGAGE INDUSTRY. SOME WITH DIFFERENT KINDS OF CARD PRACTICES, AND OTHER TYPES OF LENDERS. OUR BELIEF IS THE CONSUMER PROTECTION AGENCY LOOKING AT THIS FUND BALANCE WILL REQUIRE THE INDUSTRY AND REQUIRE THE CONSUMER TO COME TO THE WAY THAT WE'VE ALWAYS DONE IT. THAT'S WHY IT'S NOT BEEN A BIG CONCERN AND WE'VE BEEN SUPPORTIVE IN THIS LEGISLATION BECAUSE WE THINK IN AMERICA THAT WE HAVE TO MAKE SURE THAT THE MORTGAGE CREDIT DOES NOT CAUSE THE KIND OF DAMAGE TO CONSUMERS THAT IT DID IN THE CYCLE. THE ONLY WAY TO DO IT IS TO ACTUAL REGULATE THE PRODUCTS. THE KINDS OF MORTGAGES THAT WERE MADE. WE DIDN'T MAKE THEM, WE'RE CLEANING UP OTHER PEOPLE’S ACTIVITIES WHO DID MAKE THEM AND WE THINK THE CONSUMER PROTECTION BUREAU COULD ACTUALLY HELP MAKE SURE THAT DOESN’T HAPPEN IN THE FUTURE.

SORKIN: BRIAN, THE FIRM RECENTLY DISCLOSED THAT IT HAD MISTAKENLY BOOKED CERTAIN REPOS AS SALES RATHER THAN BORROWINGS. A LOT OF PEOPLE WANT TO UNDERSTAND HOW DID THAT HAPPEN? CAN YOU TALK ABOUT THAT A LITTLE BIT?

MOYNIHAN: YOU HAVE TO PUT THE CONTEXT AROUND WHAT WE DISCLOSED. AND WHAT WE DISCLOSED WAS, AS WE LOOKED AT LITERALLY THOUSANDS AND THOUSANDS OF TRANSACTIONS, WERE ACCOUNTING JUDGMENTS MADE ON EVERY ONE OF THEM. WE FOUND SIX THAT WOULD IN HINDSIGHT WOULD HAVE CHARACTERIZED THE OTHER WAY. THE LARGEST AMOUNT WAS $10 BILLION. WE HAVE A $2.5 TRILLION BALANCE SHEET. IF YOU TAKE THAT AS A PERCENTAGE, YOU THINK ABOUT THE THOUSANDS AND THOUSANDS OF TRANSACTIONS THAT GO THROUGH IT, IT'S IMMATERIAL IN ANY CONTEXT. WE WENT BACK AND DID A FULL REVIEW OF NOT ONLY OUR ACTIVITIES BUT LEGACY MERRILL'S ACTIVITIES. WE DISCLOSED IT IN THE FIRST QUARTER 10-Q, AND SAID HERE'S WHAT THE RESULTS OF THAT WERE. WE FIXED IT. WE WENT BACK AND DID IT. THERE’S ANOTHER PART OF THE CONTEXT WHICH IS AS BANK HOLDING COMPANIES, WE'RE REGULATED ON OUR AVERAGE ASSETS AND OUR END OF PERIOD ASSETS. AND SO BECAUSE WE HAD DIFFERENT CAPITAL RATIOS APPLY TO BOTH THE SO CALLED LEVERAGE RATIOS. IT'S ALL BE IN OUR 10-Qs AND 10-Ks FOR QUARTERS AND QUARTERS WHERE WE TALK ABOUT OUR BALANCE SHEET AND OUR LEVERAGE RATIOS AND OUR TIER ONE RATIOS. IT'S ALL OUT THERE. WE FOUND OUT THE TECHNICAL ACCOUNTING RULES WERE NOT RIGHT. AND WE WENT BACK AND WE FIXED IT.

KERNEN: BRAIN, YOU KNOW, SMALL BUSINESSES DO MOST OF THE HIRING, IT'S IMPORTANT THEY FEEL CONFIDENT. DO YOU SEE THE SAME ANECDOTALLY, THE SAME WORRIES ABOUT THE FUTURE OR UNCERTAINTY HOLDING THEM BACK FROM ASKING BANK OF AMERICA FOR LOANS TO EXPAND THEIR BUSINESSES TO HIRE MORE EMPLOYEES. HOW DO WE FIX THAT? WHAT WOULD YOU TELL THE ADMINISTRATION TO DO THAT COULD HELP SMALL BUSINESSES FEEL MORE CONFIDENT ABOUT HIRING EMPLOYEES?

MOYNIHAN: WE'VE BEEN TALKING TO SECRETARY GEITHNER AND HIS TEAM FOR MANY MONTHS. THIS IS A CORE ISSUE. IT’S NOT ONLY SMALL BUSINESSES, BUT LARGE BUSINESSES. BECAUSE OUR SUPPLY CHAIN WHEN WE ANNOUNCED WE'RE GOING TO SPEND BILLIONS OF DOLLARS ON PRODUCTS AND SERVICES AND PAPER AND THINGS LIKE THAT, AND WE ANNOUNCED WE DO 10% MORE SMALL BUSINESSES WHICH HELPS SMALL BUSINESSES. SO IT’S EVEN LARGE COMPANIES, HOW THEY BEHAVE THAT HELP DRIVE ACTIVITY OF SMALL BUSINESS. THE NUMBER ONE ISSUE THAT I SEE WHEN WE TALK TO COMPANIES WILL SAY $10 MILLION IN REVENUE, $5 MILLION, OR $3 OR $15 IS THAT THEY NEED DEMAND FOR THEIR PRODUCTS. AND SO WE TRY TO CREATE DEMANDS THROUGH OUR PURCHASING—CHANGING OUR PURCHASING AROUND. DAVID DARNELL AND HIS TEAM HAVE BEEN THE LEADER IN DOING THAT.IF THEY HAD DEMAND FOR THE PRODUCTS, THE LOANS WOULD BE ISSUED AGAIN.THAT'S A CONUNDRUM.THERE ISN'T DEMAND FOR THE PRODUCTS, OR THERE ISN’T GROWTH AND DEMAND FOR THE PRODUCTS. THEREFORE THEY WANT CAPITAL. BUT THE CAPITAL THEY WANT IS TO FUND OPERATING LOSSES TO WAIT FOR THE ECONOMY TO RECOVER. THAT'S NOT WHAT THE LOANS ARE FOR. THAT’S WHAT EQUITY IS FOR.

KERNEN: I’M SURE YOU GET THE NEW YORK TIMES, BUT WE'RE GOING TO HAVE TO PLUG ANDREW ROSS HERE. YESTERDAY THERE WAS A BIG PIECE ON JAMIE DIMON, ONE OF YOUR COMPETITORS, WHO EXPRESSED SOME CHAGRIN THAT ALL BANKERS HAVE BEEN THROWN INTO THE SAME BOAT BY THE OBAMA ADMINISTRATION AS BAD GUYS AND THAT REALLY MIFFS HIM. DO YOU HAVE SIMILAR FEELINGS. HOW DO YOU GET ALONG WITH THE ADMINISTRATION? YOU SAID YOU TALK TO SECRETARY GEITHNER A LOT. CAN I GET YOU TO SAY ANYTHING THAT WILL SHOW UP SOMEWHERE ELSE?

MOYNIHAN: THAT'S THE GOAL YOU HAVE. MAYBE NOT FOR ME. HERE'S A THING, WE HAVE AN INDUSTRY WHO HAS HAD 200-PLUS-YEAR HISTORY.OUR COMPANY IS 230 YEARS OLD, PROVIDING CAPITAL, HELPING BUSINESSES GROW AND THE U.S. BE SUCCESSFUL. IN THE LAST 24 MONTHS, THE INDUSTRY HAS TAKEN A LOT OF HITS BECAUSE OF SOME OF THE ACTIVITIES AND NOT ALL OF THE ACTIVITIES WERE DONE BY EVERYBODY.I CAN UNDERSTAND JAMIE'S POINT OF VIEW ON THAT. I TALK OFTEN ABOUT HOW TO CHANGE THE DYNAMICS THAT GO ON IN PUBLIC AND STUFF ABOUT OUR INDUSTRY. I THINK OUR INDUSTRY PROVIDES A VALUABLE SERVICE. I THINK OUR COMPANY IS KEY TO HELPING THE U.S. ECONOMY GROW OR WE'RE IN ONE OR TWO HOUSE HOLDS AS BECKY SAID. ANYONE WHO WILL TALK AND THINK ABOUT HOW DO WE HELP THIS COUNTRY CONTINUE TO GO FORWARD IS A VALUABLE CONVERSATION. WE MADE SOME MISTAKES, WE SAID THAT. BUT ON THE OTHER HAND, WE’VE ALSO CONTRIBUTED A LOT. WE LENT THREE QUARTERS OF A TRILLION DOLLARS LAST YEAR TO BUSINESSES, RENEWALS OF CREDIT, AND WE CONTINUE TO DO EVERYTHING WE CAN TO MODIFY LOANS IN THE MORTGAGE AREA. WE CONTINUE TO DO ALL WE CAN TO SUPPORT THE ECONOMY. SO SOMETIMES THERE'S A FRUSTRATION BY MYSELF AND OTHER COLLEAGUES SAYING, WAIT A SECOND, DO THEY SEE THE THINGS WE'RE TRYING TO DO ARE GOOD THINGS AND THE THINGS WE DID OVER TIME ARE GOOD THINGS. AND THEY SEE THE RELATIVELY NARROW SET OF ISSUES, BUT THAT'S LIFE. IT'S LIFE WHERE WE ARE NOW. PEOPLE FEEL BETTER ABOUT THEIR PROSPECTS, I THINK THESE THINGS WILL CHANGE. WE'VE SEEN IN OUR CUSTOMER WORK AND STUFF THAT OUR BRAND NUMBERS CONTINUE TO IMPROVE AS OUR COMPANY RECOVERS AND AS THE ECONOMY RECOVERS.

QUICK: BRIAN, REAL QUICKLY. REALTY TRACK CAME OUT WITH SOME NUMBERS EARLIER THIS WEEK AND SAID WE'RE ON TRACK FOR THE NATION TO SEE A MILLION FORECLOSURES THIS YEAR. DOES THAT SOUND RIGHT WITH WHAT YOU SEE IN YOUR NUMBERS?

MOYNIHAN: I'D SAY -- I DIDN'T SEE THAT REPORT. BUT I SAID THERE WOULD BE AN ELEVATED LEVEL OF FORECLOSURES AND SHORT SALES ALL OF WHICH INVOLVE THE HUMAN ELEMENT OF A PERSON LOSING THEIR HOME THAT WILL BE ELEVATED FOR NOW, NEXT YEAR, AND PROBABLY THE YEAR AFTER, OVER WHAT WE THINK ARE NORMALIZED LEVELS.AND WE'RE WORKING THROUGH ALL THAT. THIS IS ONE OF THE MOST DIFFICULT THINGS TO GO THROUGH RIGHT NOW. WE HAVE 16,000 PEOPLE TRYING TO HELP HOMEOWNERS.EVERY ONE HAS A HUMAN ELEMENT THAT'S TRAGIC.A PERSON IS LOSING THEIR HOME BECAUSE THEY CAN'T MAKE THE PAYMENTS.THOSE NUMBERS WOULD BE CONSISTENT WITH WHAT I WOULD SEE. THEY'RE GOING TO BE ELEVATED.ON THE OH HAND, I CAN TELL YOU FROM AN ECONOMIC PERSPECTIVE, THE -- NOT DIMINISHING THE HUMAN ELEMENT ISTHAT THE VOLUME OF PEOPLE WHO ARE BUYING HOMES AND STUFF OUT OF SHORT SALES AND STUFF IS STRONG.SO WHEN ONE DOESN'T GET DONE, ANOTHER BUYER STEPS UP.THERE'S ACTIVITY.IT'S GOING ON.THIS IS A -- WE SORT OF -- THERE'S DELINQUENCIES COME DOWN AND STUFF COMING IN TO THE SYSTEM IS BEING CUT OFF, WE'RE NOW, YOU KNOW, IN OUR COMPANY, WE HAVE 15 MILLION MORTGAGE CUSTOMERS.WE HAVE ABOUT A MILLION PLUS THAT ARE DELINQUENT.AND WE'LL WORK THROUGH OVER THE NEXT COUPLE OF YEARS THOSE CUSTOMERS.BUT YOU SORT OF SEALED OFF THE IN FLOW TO SOME DEGREE.NOW WE HAVE TO GO TO WORK ON THE PROBLEM.

KERNEN: BRIAN, FINALLY, ONE LAST QUESTION. YOU KNOW, THE GOLDMAN THING IS SETTLED. THERE’S A LOT OF CONCERN THAT MAYBE THERE'S ANOTHER SHOE TO DROP AT SOME POINT. BUT THE SETTLEMENT, THERE'S SOME CONJECTURE THAT MAYBE THIS IS CLOSING THE BOOK, MAYBE, ON THE CDO ISSUE WITH A LOT OF THE BANKS. DO YOU FEEL THAT WAY? DO YOU KNOW, IS THERE ANYTHING PENDING IN MERRILL—IN THAT COMPANY'S CDO BUSINESS DATING BACK A COUPLE OF YEARS THAT THE SEC IS LOOKING AT THAT. YOU GOT A WELLS NOTICE. ANYTHING HAPPENING ON THAT FRONT?

MOYNIHAN: WE HAD LITIGATION FROM THE LEGACY, MERRILL AND COUNTRYWIDE THAT WE'RE WORKING THROUGH. I LEAVE IT AT THAT.

KERNEN: ALL RIGHT. THANK YOU.

QUICK: BRIAN, THANK YOU VERY MUCH FOR YOUR TIME. WE APPRECIATE IT.

MOYNIHAN: THANK YOU.

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