(, ) was a bank holding company headquartered in
Wilmington, Delaware prior to being acquired by
Bank Of America in 2005. It was the world's largest independent
Credit Card issuer, specializing in
Affinity Marketing . The name MBNA was derived from Maryland Bank National Association which MBNA was spun off from but MBNA is not an acronym.
On June 30, 2005, MBNA announced that it was being acquired by
Bank Of America for stock and cash totalling more than $35 billion. The deal was closed on January 1, 2006. The merger resulted in MBNA being renamed to
Bank Of America Card Services while still based in Delaware.
This purchase was a reunion of sorts. In 1993
NationsBank bought Maryland National Bank (whose credit card division was spun off years earlier to become MBNA). Five years later, the Bank of America that exists today was the result of the merger between the San Francisco-based Bank of America and the Charlotte-based NationsBank. In 2005, with Bank of America buying MBNA, it is in effect, reuniting Maryland National Bank's credit card portfolio to its original banking assets and combining the Bank of America credit card portfolio with MBNA's.
MBNA was founded in 1982 by a group of Maryland National Bank executives headed by Charles M. Cawley. Until his recent death,
Cleveland Browns owner
Al Lerner served as Chairman of the Board. The company's first branch was in
Ogletown . When the company relocated to Delaware, its first office was housed in a converted
A&P supermarket.
The company, which had operations throughout the
United States ,
Canada ,
Ireland ,
Spain , and the
United Kingdom , also provided retail deposit, consumer loans, and insurance products.
Employing more than 25,800 people around the world at the time of merge with the Bank of America, MBNA owned or managed more than $122.5 billion in outstanding consumer credit loans. Most of this loan debt was held in securitized portfolios that had been sold to other entities such as insurance companies and pension funds. MBNA virtually invented the process for securitizing credit card debt and this process contributed significantly to the fast growth of the company. It allowed for increasing the amount loaned without having to acquire matching assets to offset the loans.
As of December 15, 2005, the
Federal Reserve Board gave final approval to the merger between
Bank Of America and MBNA. The merger closed on January 1, 2006.
Individuals at MBNA have been strong financial supporters of the
U.S. Republican Party . As a group, employees of MBNA are the top all-time campaign donors to
George W. Bush , and over 80% of the political donations made by MBNA employees and its
PAC go to Republican candidates. A few critics of the Republican party and of MBNA have organized a fledgling boycott of the company. It does not appear to have had any effect.
MBNA was one of the prime movers in lobbying for the passage of the
Bankruptcy Abuse Prevention And Consumer Protection Act Of 2005 . The company, among other credit card issuers, had lobbied for 11 years to increase restrictions on personal
Bankruptcy declarations since the bill was first vetoed in 1994.
In 2005, the
Human Rights Campaign named MBNA among the worst financial sector employers for
Gay, Lesbian, Bisexual And Transgendered persons. It scored 43% on the group's Corporate Equality Index. The index rates companies on seven key indicators of fair treatment for GLBT employees, including non-discrimination policies and domestic partner benefits. This is the lowest score amongst the financial sector firms included, and is in sharp contrast to many of its competitors.
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