Connecticut Attorney General Richard Blumenthal has sued Bank of America's (NYSE: BAC) Countrywide Financial alleging that the company misled borrowers into taking on risky loans that they couldn't afford. California, Illinois, and Florida have filed similar charges, and it seems likely that more will follow.

Blumental said that "Countrywide conned homeowners into mortgages they simply could not afford," and wants Countrywide to amend mortgages that violated state laws and make restitution to affected borrowers. Blumenthal is also seeking fines of $100,000 per violation of state banking laws, and up to $5,000 per violation of state consumer protection laws.

The consumer fleecing side of this story has been well documented, so I'll tackle it from the investment side. Here's my question: why the heck is Bank of America keeping the Countrywide name? I know: the company has been developing its status as the leading mortgage lender since 1969 but as Warren Buffett said "It takes 20 years to build a reputation and five minutes to ruin it." All the attorneys general investigations, protests, congressional hearings on corporate gluttony, and media trashing have destroyed whatever goodwill the company had. I would argue that Countrywide's brand equity is negative at this point: how many people read an article about a company getting sued by a grab bag of states for deceptive lending practices, and then head off to the local office to get a loan?

Bank of America has stood by the brand so far, but my guess is that that's just grandstanding to make the deal look less boneheaded. I'm going to predict that within a year, Bank of America will begin re-branding its Countrywide locations.