Elan Financial Services of Minneapolis said it has acquired the credit card assets of 28 financial institutions that collectively have about $700 million in outstanding balances.
Elan, a unit of U.S. Bancorp that offers debit card processing and other services to financial institutions, made the acquisition from FIA Card Services, a Wilmington, Del., a unit of Bank of America Corp. Terms weren't disclosed.
The credit card assets are part of a portfolio that appear to have had a troubled history. Last year, Bank of America said FIA Card Services lost $6.6 billion as a result of a $10.4 billion writedown. Last February, Bank of America restated the 2010 writedown to $20.3 billion, citing increased defaults and the effects of the 2009 Card Act -- federal legislation which curbed credit card fees and interest-rate increases.
The assets that Elan Financial acquired include small business and consumer credit cards, which Elan will continue to market under their existing financial institution names. Existing cards will be usable until Elan issues new ones in mid-2012.
Steve Alexander • 612-673-4553
