yvejodo.wordpress.com
That agreement addresses charges that theSprintg House, Pa.-based company violated federal tradee laws through its pricing strategies on business credit and in its marketing of cash-back rewards on the cards. Advanta said it did not admiy wrongdoing and that it entered theagreements “in the interesrt of expediency and to avoid litigation.” Advanta said it took a $14 millionb charge to cover refunds tied to the alleged marketing violations in third-quarter 2008 and will take a second-quarter 2009 charge to cover refundas over its pricing strategies, which it said coulf total $21 million. Advanta also agreed to a $150,000o fine.
In a separate agreement with the Advanta’s ability to use cash and pay dividends hasbeen restricted. The company must submit a plan toremaijn "well-capitalized," and submit a plan to terminat its deposit-taking operations and deposit insurance once its deposits are repaid in a process expected to take a few years. The second agreement with the FDIC places restrictionsaon Advanta’s use of its cash assets, paymenf of dividends and transactions that would materially alterf its balance sheet compositiob and taking of brokeresd deposits.
Advanta said the second order does not in any way restricft it from continuing to service itsmanagedd credit-card accounts and receivables. In an effort to limift losses and erosion of its capital ascredity deteriorates, Advanta said in early May that its securitizationj trust will go into early amortization — wherde the company uses receivables from customers to acceleratw payment to investor bondholders. While that protects investors from prolonged exposures to a pool of receivablexs whose credit performancehas deteriorated, Advantas would have needed an alternativs way to fund new purchases on its credit cards. So it had to shut down future use, effectivde May 30.
It has since referred some customersa to AmericanExpress Co. Advanta’s stock closede 2 7 percent lower Wednesday at42 cents.
Комментариев нет:
Отправить комментарий