Regulators Seize Advanta Bank
Advanta Bank, the small business credit card issuer, was closed by state and federal regulators on Friday, according to the FDIC. The bank had been a shell of its former self for quite some time, having initially announced in May 2009 that it planned to shut down credit card accounts and in July, agreeing to settle charges that it had engaged in “unfair and deceptive practices.” Its parent company, Advanta Corp, filed for bankruptcy protection in November, and since then has essentially reduced its operations to collecting outstanding balances on its accounts and making payments to its investors.
With the bank’s seizure, the main question for the 360,000 outstanding accounts owing $2.7 billion is whether they will have an easier time renegotiating their payments with the FDIC as their creditor. Customers with questions about the closure can call the FDIC toll-free at 1-800-537-4048.