Mar 03, 2011 Brian Bradley
Bank of America took a significant step toward reducing the overall value of its credit card sector to represent more than $20.3 billion in assets on Monday, according to Bloomberg. The decision was made to represent a "goodwill impairment" on funds that defaulted in the two years since the Credit Card Responsibility and Accountability Act went into effect in early 2009.However, BofA was quick to state that the decision does not represent any issues regarding the bank's financial standing or the "financial results, safety and soundness or the capital position," Robert Stickler, a Bank of America spokesman, told Bloomberg. But one analyst noted that nearly doubling the write-down is a signal that the bank's credit card holders may not be as strong as publicly perceived. "This is another sign that the quality of the bank’s consumer-credit book is weaker than what they previously indicated," Tony Plath, a finance professor at the University of North Carolina at Charlotte, told Bloomberg. "It’s a huge number, and the way they’re disclosing it erodes the bank’s credibility." According to The New York Times, the new write-down signifies a major overhaul from the $10.4 billion impairment that was on the books last year as part of BofA's FIA Card Services.