Is Bank of America a JDB?

[bigswanging23]

I had an MBNA CC that I defaulted on in 2004.

Bank of America bought MBNA in 2005. And they didn't just buy the buildings, and desks, and cubicles of MBNA, they bought their portfolios and accounts, including mine.

Does this make BofA a JDB? They are reporting on my CR as the OC, but are they really?

In other words, can I DV BofA?

[AboveAverage]

I had an MBNA CC that I defaulted on in 2004.

Bank of America bought MBNA in 2005. And they didn't just buy the buildings, and desks, and cubicles of MBNA, they bought their portfolios and accounts, including mine.

Does this make BofA a JDB? They are reporting on my CR as the OC, but are they really?

In other words, can I DV BofA?

If you are serious, then no, because the companies merged when BOA acquired MBNA. Since BOA bought MBNA, that means they keep MBNA's revenue and debt.....

If you are trying to be cute and clever, then good job...that did make me laugh. Nice one though.

[LeslieR]

I don't think the OP was trying to be funny.

No, BofA is not a JDB.

[flacorps]

Interesting question, at least insofar as the nonperforming but not yet written off credit card receivables go.

I'm sure there's a line drawn somewhere in the FDCPA ... I'm not going to go hunt for it at the moment.

But as a practical matter if the debt wasn't in a charge-off status when BofA bought it, then treat BofA as the OC, if not then treat BofA as a JDB.

[willingtocope]

I also don't think the OP was trying to be funny...but...if the account was in default when BofA bought it, then, technically, they are a JDB. I'm pretty sure there's a court case cite around here somewhere about that.

[bigswanging23]

I had an MBNA CC that I defaulted on in 2004.

And they didn't just buy the buildings, and desks, and cubicles of MBNA, they bought their portfolios and accounts, including mine.

note the subtle use of hyperbole. I know BofA is not a JDB.

[AboveAverage]

I don't think the OP was trying to be funny.

No, BofA is not a JDB.

Also too, for BOA to be a JDB, the debt would have had to be the only thing BOA bought, no? If the debt is still in-house with everything else BOA acquired from MBNA, then BOA would have to be treated like an OC.

I really thought the OP was trying to be clever, though.

[AboveAverage]

note the subtle use of hyperbole. I know BofA is not a JDB.

See guys....told ya. LOL

[willingtocope]

FDCPA 803.

4) The term "creditor" means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another

BofA is a JDB in this instance.....

[bigswanging23]

BofA is a JDB in this instance.....

Wait...so you're saying that BofA IS, in fact a JDB?

Perhaps my hyperbole has opened up something here...

This is interesting.

[AboveAverage]

FDCPA 803.

4) The term "creditor" means any person who offers or extends credit creating a debt or to whom a debt is owed, but such term does not include any person to the extent that he receives an assignment or transfer of a debt in default solely for the purpose of facilitating collection of such debt for another

Clearly, BOA did not "solely" acquire MBNA for JUST the purpose of facilitating collection of such debt for another? MBNA is BOA, or am I just reading that wrong?

[flacorps]

OK, now we've gotta define default. Is that being 1 payment behind, or is that chargeoff status ... or something in between the two?

I recall a situation on the boards where declaration of default by the creditor was deemed too squishy a standard (because the credit could choose when to do it) by a court somewhere with respect to some debt and some time clock that the debtor needed to have start running sooner rather than later. Sorry for being vague, perhaps I need that new British Alzheimer's drug nobody's gonna get because it's too expensive.

[flacorps]

Clearly, BOA did not "solely" acquire MBNA for JUST the purpose of facilitating collection of such debt for another? MBNA is BOA, or am I just reading that wrong?

We need to know in this instance whether BofA's acquisition of MBNA was a "stock deal" or an "asset deal"?

Was there an MBNA corporate husk left behind, or did it get merged into BofA?

[AboveAverage]

We need to know in this instance whether BofA's acquisition of MBNA was a "stock deal" or an "asset deal"?

Was there an MBNA corporate husk left behind, or did it get merged into BofA?

MBNA I believe was absorbed into BOA. We need not take my word for it....

Try Forbes:

http://www.forbes.com/markets/feeds/afx/2006/01/02/afx2423671.html

Plus, the MBNA Building in Newark, NJ has had it's name changed to FIA Card Services, so something to that event...MBNA no longer exists...

[bigswanging23]

The card has now been charged off. I think, but I can't really remember, it was charged off before BofA acquired MBNA.

Either way, I don't see how it would matter much.

[LeslieR]

Charged off, but still owned by MBNA at the time of sale to BofA?

Like you say, OP, I don't think it makes much difference.

If you have legitimate questions/concerns about the way this item is being reported, definitely take it up with BofA since that's who is reporting and it would be better to deal with them than any CA working the account. (You didn't mention if it's a paid C/O).

If there are no errors, then I would hate to see you try to work this situation (bank merger) to revise your credit history.

OTOH, if this was a paid c/o, you can try a form of "DV" and see if BofA acquired records from MBNA. ... and try to obtain a deletion that way.

I know I'm talking out of both sides of my mouth, but if you paid the c/o, I'll allow you a little room for situational ethics.

[Robert Nashville/Savannah]

A bank does not become a JDB because they buy another bank and that other bank has (as all banks will) receivables (debts) owed to it; whether or not those debts are in default or in good standing and whether or not a debt has been written off for accounting purposes.

The new bank retains all the rights and obligations of the original creditor and, as far as the law is concerned, is the original creditor.

At least that’s how I read the law (and what I remember form business law classes eons ago).

In any case, I think we all know that even a true JDB retains full rights to a debt it buys meaning the legal relationship between a JDB and the debtor has not materially changed because of the transaction…I think we also know that "JDB" is simply a pejorative term that gets thrown around by consumers; often as a means to justify not paying a debt they may well legally owe.

I’m not beating up on anyone here nor am I suggesting that a JDB who paid $10 for a $1,000 debt should get a $1,000 from the consumer; just calling it like I see it.

[bigswanging23]

The charge off was definitely my fault. It was me who stopped paying on the card. I had no money in which to pay them, but that is really beside the point. I haven't disputed the entry with either the CRA's or the OC, and I don't think I'm going to. It was my fault.

I had a creative writing prof in college who'd always make a distinction between "interesting" and "meaningful".

Pop rocks are interesting. American Idol is interesting. Watching people punch each other at a bar is interesting.

But is it meaningful?

Determing if BofA is a JDB strictly defined IS interesting.

But, even so, what does it mean for you and I and countless others? Would this change anything? Who would this affect? Does this help or hurt anyone?

In short, even if we could determine that BofA was a JDB, is it meaningful?

[AboveAverage]

In short, even if we could determine if BofA was a JDB, is it meaningful?

I think level of interest you generated plus your own desire to put BOA in the same ilk as Midland or AFNI would have clearly been meaningful (for you) if BOA was a JDB...

It was definitely lively, I'll say that much.

[Robert Nashville/Savannah]

.....

I would say it is not meaningful (but entertaining).

The only real change the "JDB" distinbtion would make is that BoA would be subject to the FDCPA as they tried to collect the account (which is probably moot anyway since BoA probably uses CAs anyway would already are subject to the FDCPA).

Having the FDCPA apply is better than not having it apply but the FDCPA won't protect a consumer from eventually having to pay a legitimate debt legally owed.

[bigswanging23]

I think it's clear that a bank acquisition does not make the acquiring bank a "junk debt buyer" as we on this board understand the term. BofA is quite a bit different than Arrow, Asset Acceptance, NCO, et al. Not that I hold Bank of America in high regard or anything, but their business is nowhere close to the sleaze and liars of JDBs.

[willingtocope]

I think it's clear that a bank acquisition does not make the acquiring bank a "junk debt buyer" as we on this board understand the term.

Actually, no, I disagree with that. Anyone buying a debt that is "in default" at the time they purchase it, fits the definition of a junk debt buyer. That includes BofA.

Like flacorps, I remember a court case cited on the board here to that effect.

The ruling was something to the effect that when one CC bank acquires another, they must treat "good, performing" accounts differently than "bad, non-performing" accounts. One is an asset, the other is not.

So, unless when BofA bought MBNA, they issued you a new card and let you continue to charge on it...they bought an already defaulted upon, non performing, bad debt. They're a JDB in that instance.

(Of course, unless you can do a search on the board here and find the specific site, this is just IMHO).

[Robert Nashville/Savannah]

By that line of reasoning, would not a mortgage lender that buys another mortgage lender's accounts, which happens frequently, be a "JDB" if some of those accounts, as some almost certainly are, are in "default" by a day (or more)?

I would doubt that.

In any case, again, a subsequent creditor still has the legal right to be paid so whether BoA or the mortgage lender in my example is a "JDB" or not is immaterial in any way that really matters.

[willingtocope]

Of course, you're right...it does depend upon what the definition of "non-performing bad debt" is. Charge off? Default? Late?

But...also, as you pointed out...the distinction is important because your can deal with a JDB differently than you do with an OC.

[bigswanging23]

Actually, no, I disagree with that. Anyone buying a debt that is "in default" at the time they purchase it, fits the definition of a junk debt buyer. That includes BofA.

As a matter of logic, I understand this argument.

But as a matter of practicality, where would this end? For instance, let's say I purchase, say, a currently-operating local flower shop. Well, the flower shop most certainly has accounts receivable, customers who charged flowers but never paid for them, bad dets, etc.

So am I now a JDB?

Again, I see the logic of your argument, but it seems its application would have us barreling 800 mph down a slippery slope.