Fed Approves Bank of America / MBNA Merger
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Fed
Approves Bank of America / MBNA Merger
The Board of Governors of the Federal Reserve gave the OK to
the proposed merger of credit card giants Bank of America and
MBNA Thursday. The approval marked the final regulatory hurdle
in creating the largest credit card issuer in the United States.
According
to Bank of America, the combined operations will have 40 million
active U.S. accounts and nearly $140 billion in managed balances.
?MBNA?s
marketing and product development capabilities are significant,?
said Ken Lewis, chairman and CEO of Bank of America. ?They deliver
innovative products to market faster than anyone in the industry."
?We
are excited about how the combination of MBNA and Bank of America
will benefit our customers and investors.?
In
a press release, Bank of America stressed the importance of
MBNA affinity card programs. MBNA offers over 5,500 affinity
credit cards in partnership with organizations and retail stores
including the NFL, many major universities, Hard Rock Cafe,
Royal Caribbean, L.L. Bean. Liam McGee, president of Bank of
America Global Consumer and Small Business Banking, said, "Affinity
customers typically carry larger balances, demonstrate higher
credit card usage and have a greater propensity to purchase
multiple products."
It
is unclear if the MBNA brand will disappear, but the announcement
that current MBNA CEO Bruce Hammonds will head up Bank of America
Card Services may be a clue that MBNA cards could be re-branded
with the Bank of America name.
The
Bank of America/MBNA merger is expected to close January 1,
2006.
Published 12/16/05 (Modified 11/26/12)
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