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Fed Approves Bank of America / MBNA Merger

by Peter Andrew

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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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