Advanta Bank Liquidated By FDIC

[DeadManCrawling]

March 19, 2010

The Federal Deposit Insurance Corp. (FDIC) approved the payout of the insured deposits of Advanta Bank Corp., Draper, Utah. The bank was closed today by the Utah Department of Financial Institutions, which appointed the FDIC as receiver.

The FDIC was unable to find another financial institution to take over the banking operations of Advanta Bank Corp. As a result, checks to depositors for their insured funds will be mailed on Monday. Brokered deposits will be wired once brokers provide the FDIC with the necessary documents to determine if any of their clients exceed the insurance limits. Customers who placed deposits with brokers should contact the brokers directly for more information about the status of their funds.

As of December 31, 2009, Advanta Bank Corp. had approximately $1.6 billion in total assets and $1.5 billion in total deposits. At the time of closing, the bank had an estimated $247,000 in uninsured funds. This amount is an estimate that is likely to change once the FDIC obtains additional information from the bank's customers.

Customers who have questions about today's transaction can call the FDIC toll-free at 1-800-537-4048. Customers with accounts in excess of $250,000 also should contact the toll-free number to set up a telephone appointment to discuss their deposits. The phone number will be operational this evening until 9:00 p.m. Mountain Daylight Time (MDT); on Saturday from 9:00 a.m. to 6:00 p.m. MDT; and on Sunday from noon to 6:00 p.m. MDT; and thereafter from 8:00 a.m. to 8:00 p.m. MDT. Interested parties also can visit the FDIC's Web site at http://www.fdic.gov/bank/individual/...dvanta-ut.html.

Beginning on Monday, customers of Advanta Bank Corp. with deposits exceeding $250,000 at the bank may visit the FDIC's Web page "Is My Account Fully Insured?" at https://www2.fdic.gov/drrip/afi/index.aspwww.fdic.gov, by subscription electronically (go to www.fdic.gov/about/subscriptions/index.html) and may also be obtained through the FDIC's Public Information Center (877-275-3342 or 703-562-2200). PR-58-2010

http://www.fdic.gov/news/news/press/2010/pr10058.html

[DeadManCrawling]

This has been expected for a while, but is a very happy occurrence from my perspective. They were among the first to refuse to work with us on terms.

The parent corp filed CH 11 last fall, but was trying to save the bank division. Apparently they decided it wasn't worth it.

No one else thought so either.

No buyers for 1.5 BILLION in deposits. This place must have been as big of a mess as they appeared to be. Or worse.

I am researching the FDIC's history with regards to previously charged off A/R since my company still owes Advanta money from 5 years ago. Not that it would sell for much at FDIC auction. Advanta still has hundreds of millions in other A/R that hadn't yet been charged off as well. Presumably, some people kept paying on their balances even after they were unable to use the card last June.

FDIC cannot get into the credit card biz, so someone will be sold the portfolio. This will be interesting to watch.

The downside, as always, is the cost to taxpayers. Too bad there isn't a way to bill the executive team.

Best,

-dmc

[DeadManCrawling]

On further research:

The credit card portfolio appears to be already included in the CH 11 liquidation process. It appears I was wrong, and almost 90% of their credit card customers were already in default or decided to be in default when Advanta froze the cards.

CREDIT CARD - CHARGED OFF* $149,441,104.25
CREDIT CARD - PRE-CHARGE OFF* $ 10,830,291.72
CREDIT CARD - CURRENT* $ 33,562,906.91
ALLOWANCE FOR CREDIT LOSSES -$ 7,800,000.00
ALLOWANCE FOR INTEREST & FEES -$ 314,170.00

Total $185,720,132.88

This is listed as an asset on their CH 11 filing under another company, Advanta Credit Card Receivables Corporation. I suppose my debt is in there somewhere.

I will be interested to see who, if anyone, purchases all this debt. And just how good the records are that are sold with the debt. If there are any. As far as I can tell, Advanta has a total staff of two people right now, not including attorneys. I can't imagine they know everything about record storage, copies, and so on.

[HHM]

As I understood it, most of the bad debt has been sold off or with a collection agency.

[DeadManCrawling]

I would have thought so, too, HHM. But if that is the case, it surprises me that they are claiming so much as an asset in their CH 11 filing.

I wonder how much, if any, will be recalled and resold one last time before the end of the BK proceeding.

No one had tried to collect on our debt, and it was fairly big, around 90k I think, for the past 3 years. Since we filed ch 7 , we are good to go, but I am watching this in case I need to take action for my corp. The corp still owes the debt, legally, but I think it is unlikely we will ever hear about it again. If we do, then I doubt whoever is trying to collect will have adequate records to pursue it.

I am interested mostly from the novelty aspect of things. Advanta was once the largest small business CC issuer in the country, so it's not every day we get to see this sort of thing. But who knows? It could become every day, in these strange times.

[catleg]

Yes, in my case Advanta's proof of claim was filed by PRA (portfolio recovery associates) in Norfolk VA.

[DeadManCrawling]

Cat, thanks for posting that. I am an asset case and it never even occurred to me to check that. Will do so as soon as I figure out how to.

Thanks

[catleg]

Check your Claims Register (report) in Pacer.

[banca rotta]

Advanta is just 1 of 7 that failed this week. Total YTD are 37.

Rumors are flying that there are a couple of thousand on the FDIC watch list of failing.

Also the Fed was sued by Bloomberg and just lost it's appeal which means if it doesn't appeal to a higher court then it has to put on public record ALL of the banks and other financial institutions that received bailout money for all the bad loans.

What this means in English is once they release those banks there will be major bank runs causing more to fail.

[DeadManCrawling]

I have been watching banca rotta.

The Fed can appeal to the US Supreme Court. I have a difficult time believing that this court would rule against the Fed. Though they are supposed to be impartial and sort of frozen in time, we all know that the justices are appointed with a complete partisan methodology. They are not blind to the world economy and what is happening in the USA.

If the Supreme Court orders the information released, I see bank runs as well. Unless the Fed, at that point, simply says: NO.

It is entirely possible, and will up the stakes to the level of revolution, I think. Or at least a government takeover of the Federal Reserve, possibly with all sorts of political and real-life damage that could last years or decades.

I am still astonished on an almost daily basis--by people who don't understand that the Federal Reserve is NOT a government agency. The Fed does not have to answer to you, me, anyone. They go to Congress when asked, but that is more the FED'S decision than anything.

The Fed, for any who didn't know, is a FOR-PROFIT privately held corporation, owned entirely by a small group of wealthy families and investors. They are charged with controlling our money supply and are not subject to being audited by anyone, including the government.

This is, I think, our third federally chartered central bank. The previous two failed. Why we keep trying this combination of private corporate banks controlling our nation's money supply--I have no idea.

Perhaps three times is the charm and we will devise something that is actually in our own interest next time.

[banca rotta]

I have been watching banca rotta.


This is, I think, our third federally chartered central bank. The previous two failed. Why we keep trying this combination of private corporate banks controlling our nation's money supply--I have no idea.

Back then we had Andrew Jackson. Today we have American Idle.

This central bank failed us all so miserably much worse then the others before it. They were supposed to bring financial stability and a sound currency to this nation and have done anything but since their inception.

[Dst1]

The Fed, for any who didn't know, is a FOR-PROFIT privately held corporation, owned entirely by a small group of wealthy families and investors. They are charged with controlling our money supply and are not subject to being audited by anyone, including the government.

This is just plain untrue and it's sad this tripe is still being pushed around. Every fact stated in those two sentences is wrong.

The federal reserve is not a private for profit corporation. All the governors of the federal reserve board are appointed by the President with the approval of Congress. The exact same type of accountability that dozens of federal agencies have.

It's true that traditionally the Fed is seen as "independent" and has traditionally been given more leeway than your average federal agency. But that fact is a far cry from a private for profit corporation. It has always been directly accountable to the American people.

[DeadManCrawling]

This is just plain untrue and it's sad this tripe is still being pushed around. Every fact stated in those two sentences is wrong.

The federal reserve is not a private for profit corporation. All the governors of the federal reserve board are appointed by the President with the approval of Congress. The exact same type of accountability that dozens of federal agencies have.

It's true that traditionally the Fed is seen as "independent" and has traditionally been given more leeway than your average federal agency. But that fact is a far cry from a private for profit corporation. It has always been directly accountable to the American people.

You are technically correct, but that just muddles the waters. It is easier, and more correct, to state it as I did.

The Fed is actually not for profit, but is driven entirely by profit. For anyone who wishes to learn more, you can do so at the Fed's own site.

For example, the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#5

Now, these shares are held by privately owned banks. SO, while the Fed is technically not for profit, PRIVATE banks, which ARE For-Profit, are guaranteed a 6% dividend of the nation's money?

Call it what you wish, but 6% dividends on that scale is a gigantic chunk of change. Money that I think should rightfully be funneled to the government or taxpayers, not to the folks lucky enough or wealthy enough to own the member banks, and thus able to "own" shares in this supposedly benevolent entity.

[Mensa1]

On further research:

The credit card portfolio appears to be already included in the CH 11 liquidation process. It appears I was wrong, and almost 90% of their credit card customers were already in default or decided to be in default when Advanta froze the cards.

CREDIT CARD - CHARGED OFF* $149,441,104.25
CREDIT CARD - PRE-CHARGE OFF* $ 10,830,291.72
CREDIT CARD - CURRENT* $ 33,562,906.91
ALLOWANCE FOR CREDIT LOSSES -$ 7,800,000.00
ALLOWANCE FOR INTEREST & FEES -$ 314,170.00

Total $185,720,132.88

This is listed as an asset on their CH 11 filing under another company, Advanta Credit Card Receivables Corporation. I suppose my debt is in there somewhere.

I will be interested to see who, if anyone, purchases all this debt. And just how good the records are that are sold with the debt. If there are any. As far as I can tell, Advanta has a total staff of two people right now, not including attorneys. I can't imagine they know everything about record storage, copies, and so on.

I recall having a couple of convo's with a rather suave rep from Advanta Bank... Some Advanced Settlement Rep, or ??? Thought he was super smooth. Wanted to discuss with me why I was paying X, Y and Z creditor (all secured credit accts) and not Advanta (unsecured Biz LOC).? I stroked him along a while, let him prance some, and he pressed for reasons why, this and that.

I finally told him that I was contemplating Bk... he stated that I had a obligation, a promise to pay, etc. and while that could be legally erases, he appealed to my moral side. I then asked him about his employer, "are they paying their bills?" He said why yes. I said that I was aware that Advanta had lost their funding and in turn, they filed for Ch 11 in Sept 09, so apparently Bk was a good choice for them but not for me? He grumbled.

I suggested to him that we were in exactly the same boat, Advanta intended to pay its creditors, continue with its business model, but lost its funding vehicle Summer of 09 so they discontinued business operations, closing credit lines and eventually filed for Ch 11... (and that would be temporary until the FDIC walks in the door). In my case losing bank funding for business operations left me in exactly the same predicament. At that point he hung up, never to be heard from again.

Maybe I am taking too much delight in their failing due to the smug attitude on their part, but I simply can't help it. Maybe I will call to chat with that fellow again, or just see if he is still employed there, and for how long.

[broken64]

I shed no tear for this company failing!! They were a bunch of crooks! They were one of the ones that were discharged for us, thankfully as they were charging us 39.9 % interest!!! I guess carma is a b___h!