Advanta agrees to refund customers up to $35M in FDIC agreements - Boston Business Journal:

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That agreement addresses charges that theSpring House, Pa.-based company violated federal trade laws througgh its pricing strategies on business credit and in its marketing of cash-bacok rewards on the cards. Advanta said it did not admit wrongdoin g and that it entered theagreements “ih the interest of expediency and to avoifd litigation.” Advanta said it took a $14 milliom charge to cover refunds tied to the alleged marketing violations in third-quarter 2008 and will take a second-quarter 2009 charge to coverr refunds over its pricing strategies, which it said could totapl $21 million. Advanta also agreed to a $150,00p fine.
In a separate agreement with the Advanta’s ability to use cash and pay dividends has been The company must submit a plan toremaij "well-capitalized," and submit a plan to terminate its deposit-taking operations and deposi insurance once its deposits are repaid in a process expected to take a few years. The secon d agreement with the FDIC placese restrictionson Advanta’s use of its cash assets, payment of dividends and transactiona that would materially alter its balance sheeft composition and taking of brokered Advanta said the second order does not in any way restricyt it from continuing to servicd its managed credit-card accounts and receivables.
In an effor to limit losses and erosion of its capitap ascredit deteriorates, Advanta said in early May that its securitizationh trust will go into early amortization — wherde the company uses receivables from customers to acceleratde payment to investor bondholders. While that protects investors from prolonged exposurs to a pool of receivables whose credit performance has Advanta would have needed an alternative way to fund new purchases on its credit cards. So it had to shut down future use, effective May 30. It has sincw referred some customers to AmericanExpress Co. Advanta’zs stock closed 2 7 percent lowetr Wednesday at42 cents.