Crisis Communication in the Banking Industry: Countrywide’s Use of Image Restoration Strategies

This case study analyzes Countrywide Financial’s responses to its recent financial crisis and illustrates the use of communication theory and image restoration strategies by utilizing several crisis response frameworks. The study uses a critical analysis methodology to examine the communication strategies employed by Countrywide, a large mortgage lending company in order to attempt to restore its image. The authors look at excerpts from media stories, carefully examine the language used by company representatives in response to the banking crisis, and categorize the corporate communications into various strategies as defined in the crisis communication literature. Countrywide faced several crisis situations during the period of this study, including the subprime mortgage crisis, public criticism of its CEO’s executive compensation package, allegations of insider trading, and financial difficulties. Corporate responses are critical in determining what amount of damage is done to the firm’s image during a crisis. Countrywide responded to these situations most often using the strategies of image bolstering, reducing the credibility of its accuser, and minimizing the crisis ( Benoit, 1995 ). Through these communications, the company attempted to appear well established and untarnished. It also criticized the media, the courts, and the regulators in an attempt to reduce their credibility. Countrywide made no deliberate attempt to admit fault or to take measures to prevent the problem from reoccurring.