from

(snip)"Bank of America Corp., the biggest U.S. lender by assets, almost doubled a goodwill impairment for its credit-card unit to $20.3 billion to reflect increased defaults and an almost two-year-old change in rules.

The bank restated federal regulatory filings to record the writedown to its FIA Card Services unit in 2009’s first half, the firm said yesterday in a statement. The non-cash charge, which replaced a $10.4 billion impairment booked on the unit last year, doesn’t affect “the financial results, safety and soundness or the capital position” of the Charlotte, North Carolina-based parent company, said Robert Stickler, a spokesman.

The writedown shows the credit-card unit’s prospects may have deteriorated more than initially disclosed after the U.S. passed legislation, known as the Card Act, in May 2009 to curb fees and interest-rate increases. In November, the bank said some measures would cut annual revenue by $1 billion, undermining efforts by Chief Executive Officer Brian T. Moynihan, 51, to improve returns for investors. The firm yesterday said the act and “deteriorating credit quality” caused the revision.

“This is another sign that the quality of the bank’s consumer-credit book is weaker than what they previously indicated,” said Tony Plath, a finance professor at the University of North Carolina at Charlotte. “It’s a huge number, and the way they’re disclosing it erodes the bank’s credibility. Why are we waiting until 2011 to do an impairment charge for two years ago?”
Closer Look

The restatement, covering the eight quarters of 2009 and 2010, was made in reports filed with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp., Bank of America said. "(snip)


Arguably, this unexpectedly large write-off was the result of last year's Credit Card 'Bill of Rights' Act, which limited penalty interest rates and other fees banks could previously levee on delinquent credit card account holders in an effort to minimize the bank's net losses ( from delinquent credit card holders declaring bankruptcy etc. ).

The good news is that repayment rates on B of A credit cards is improving.

The bad news, for certain types of would-be credit card seekers / holders at least, is that B of A is now being much more draconian re reduced credit limits on existing 'subprime' credit card account holders, and much more selective in regard to the creditworthiness / stability of employment / income verifiability / income to existing expense ratios etc. of new credit card applicants.

Unfortunately, exotic dancers are likely to find that B of A, and most other major banks, no longer want their credit card business ... due to the inherent income verifiability and stability issues.