BofA Credit-Card Unit Takes $20.3 Billion Write-Down
Bank of America's (NYSE:BAC) credit card unit has taken a write-down of $20.3 billion due to a goodwill impairment charge, which it said late Monday reflects continued weakness in credit quality and various regulations.
The changes to its FIA Card Services, the legal entity that includes its credit card operations, reflect the eight periods in 2009 and 2010, a result of changes to processes covering legal entities implemented in 2010 filed this month with the Office of the Comptroller of the Currency and the FDIC.
BofA said the move, which involves a non-cash, non-tax deductible charge related to the impairment, does not affect its current or previously reported consolidated financial results.
In a statement, BofA said the write-down was caused by “deteriorating credit quality” and the adverse impact on its 2009 card results from certain regulations, including the Credit Card Accountability Responsibility and Disclosure Act, which seeks to protect consumers against unfair credit card fees by limiting how banks raise interest rates on outstanding balances.
BofA said a previous write-down of $10 billion, reported for the first time Monday, was reversed because the bank determined it wasn't enough.