By DANIEL WAGNER – 15 hours ago

WASHINGTON (AP) — Risky bank policies that contributed to the financial crisis were as common in neighborhood branches as they were on Wall Street, according to a labor-backed coalition that will propose new reforms Tuesday.

Bank of America Corp. and other large banks encouraged customer service representatives and tellers to burden consumers with debt and enroll them in high-fee programs, alleges a group which includes the National Association of Consumer Advocates and the U.S. Public Interest Research Group.

“One of the core parts of the economic collapse is a business model that encourages too much risk or short-term profit over long-term stability,” said Stephen Lerner, who runs the financial reform project for the Service Employees International Union, which is coordinating the effort.

Lerner said employees under pressure to sell high-fee products ended up targeting vulnerable populations, including students and the elderly.

Bank of America spokesman Scott Silvestri could not be reached for comment Monday.

On a conference call Tuesday with the consumer and labor groups, current and former Bank of America employees will argue that banks’ reliance on fees and high interest rates contributed to the credit crisis. They will call for reforms that target the consumer end of the banking industry, even as the Obama administration continues to promote its plan for top-level regulatory reform.

Retail banks must change fees and incentives to eliminate “the current sell anything culture,” Lerner said. He said employees need whistleblower protection so they can alert regulators to risky bank practices occurring at the retail level.

That policy might have helped Christopher Feener, a 15-year veteran of the credit card industry who worked for MBNA and Bank of America, which absorbed MBNA in 2006. Feener said he and his colleagues observed routine violations of the federal Fair Debt Collection Practices Act and disclosure rules, but could not speak out for fear of reprisal.

Feener lost his job in September shortly after his wife — another former bank employee — discussed participating in an expose on network television.

“Collecting money was always a hard job, but in the last two years it just got crazy,” Feener said. He said his team was forced to call borrowers’ neighbors, falsely threaten legal action and pressure borrowers to bounce checks or default on other loans in order to meet credit card payments.

Bounced checks allowed the bank to extend collection periods for a month, so they had to report fewer loan losses and could consider more accounts active, he said.

Feener said he sensed the financial crisis as early as 2007, as customers started defaulting on credit cards without making a single payment.

Also on Tuesday’s call will be Rep. Keith Ellison, D-Minn., who hopes to push the proposed regulations through the House Financial Services Committee.