David Cowham

MBNA Corporation

Company type	Public company (before acquisition)
Industry	Financial services
Predecessor	Maryland National Bank
Founded	1982 in Ogletown, Delaware, United States
Founder	Charles Cawley
Defunct	January 1, 2006 (2006-01-01)
Fate	Acquired by Bank of America
Successor	Bank of America Card Services
Headquarters	Wilmington, Delaware , United States
Area served	United States, Canada, United Kingdom, Europe
Key people	Charles Cawley (founder), Al Lerner (chairman until 2002)
Products	Credit cards, consumer credit loans
Number of employees	25,800+ (2006)
Website	bankcardservices.co.uk

MBNA Corporation—an abbreviation for Maryland Bank National Association—served as a bank holding entity and the parent company of MBNA America Bank, N.A., with its headquarters located in Wilmington, Delaware prior to being acquired by Bank of America in 2006.

History

Originally known as the Baltimore Trust Company in the early 20th century, Maryland National Bank evolved into Maryland's largest banking network. In 1929, it erected Baltimore’s tallest skyscraper just before the onset of the Great Depression. Subsequent restructuring during the New Deal period led to its rebranding as Maryland National Bank.

MNC Financial, the parent firm of Maryland National, initiated credit card services during the 1960s. In the early 1980s, banks in Maryland attempted to lobby for increased credit card interest rates but did not succeed. In response to Delaware’s 1981 decision to eliminate caps on interest rates, MNC transferred its credit card operations there. MBNA was established in 1982 under the name Maryland Bank, N.A.

Under the leadership of founder Charles Cawley, MBNA launched its initial office inside a repurposed supermarket located in Ogletown, Delaware. A pivotal factor in its expansion was the launch of "affinity cards" beginning in 1983 with Georgetown University as the first partner. By 2004, MBNA had formed more than 5,400 affinity partnerships, capturing roughly 85% of that sector.

In 1989, Maryland Bank was renamed MBNA America Bank. The corporation separated from Maryland National in 1991, with businessman Al Lerner becoming its largest shareholder and chairman until his passing in 2002. Lerner was also known for owning the NFL team Cleveland Browns.

In 1993, Maryland National was acquired by NationsBank.

MBNA developed into one of the most lucrative companies in the United States, emerging as the largest independent credit card issuer worldwide and Delaware’s biggest private employer.

The company moved its headquarters to Rodney Square in downtown Wilmington in 1995, contributing significantly to local real estate revitalization. In 2003, MBNA collaborated with entrepreneur Steve Sims to introduce a proprietary credit card product.

It is noteworthy that several executives at MBNA had prior experience with the FBI.

Mergers and acquisitions

On June 30, 2005, MBNA revealed plans to be acquired by Bank of America for a combination of stock and cash valued at over $35 billion; the transaction was finalized on January 1, 2006. After this acquisition, MBNA was rebranded as "Bank of America Card Services" and initially continued issuing credit cards under its original name. By mid-2006, all credit card offerings were transitioned to the Bank of America brand.

Simultaneously in June 2005, MBNA purchased Loans.co.uk (LCUK), which was then recognized as the leading finance brokerage firm in the UK. Although financial details were not publicly disclosed, media sources estimated that founders David Cowham and Steve Hayes each gained wealth approximating £100 million from the deal. Eventually, MBNA/Bank of America shut down Loans.co.uk operations.

Effective January 1, 2006, MBNA was fully integrated into Bank of America as a wholly owned subsidiary. On June 10, 2006, MBNA adopted the name FIA Card Services, National Association (FIA). Subsequently, on October 20, 2006, Bank of America, National Association merged into FIA.

This acquisition reunited credit card portfolios that had been separated decades earlier: NationsBank had acquired MNC Financial (the predecessor to MBNA) in 1993; NationsBank later merged with Bank of America in 1998. The consolidation combined Bank of America's credit card assets with those held by MBNA.

At the time of merger completion, MBNA employed more than 25,800 individuals worldwide and managed consumer credit loans exceeding $122.5 billion. A majority of these debts were maintained within securitized portfolios sold to insurance companies and pension funds. MBNA was a pioneer in securitizing credit card debt—a strategy that accelerated growth by allowing loan expansion without equivalent asset accumulation.

The MBNA brand continued operations in Canada and Europe. MBNA Europe maintained headquarters in Chester, England; meanwhile MBNA Canada was based in Ottawa, Ontario. In 2007, MBNA Canada earned recognition as one of Canada's Top 100 Employers.

On August 15, 2011, Toronto-Dominion Bank announced it would acquire MBNA’s Canadian MasterCard portfolio. The acquisition closed on December 1, 2011, positioning TD as Canada’s largest MasterCard issuer and a leading credit card provider.

In January 2013, Virgin Money agreed to purchase £1 billion worth of assets from MBNA—specifically involving the Virgin Credit Card portfolio that had been jointly managed since 2002. Former MBNA Vice Chairman Lance Weaver assumed the role of Virgin Money Cards President.

On December 20, 2016, Lloyds Banking Group declared it would acquire MBNA’s UK portfolio from Bank of America for £1.9 billion—marking its first major acquisition following the financial crisis of 2008. The transaction completed on June 1, 2017; since then MBNA operates as a trading style of Lloyds Bank plc regulated by the UK's FCA.

Controversies

Shortly after completing his law degree, Hunter Biden was employed by MBNA during a time when his father, then-Senator Joe Biden, was promoting bankruptcy reform legislation that aligned with MBNA's interests. This legislation made it more challenging for individuals to qualify for bankruptcy protection. Because of this close association, Biden earned the nickname "Senator from MBNA" as noted by Byron York in a 1998 piece for The American Spectator.

MBNA was highlighted in a 2004 Frontline special aired on PBS, which examined unfair practices by credit card companies.<ref> Allegations included abrupt increases in interest rates, altering billing cycles without notice, and raising fees due to late payments. MBNA was identified as a primary user of these aggressive rate increases. For additional information, see credit card.

In Ireland, MBNA faced criticism for persistently contacting customers who were behind on payments—sometimes up to eight calls per day—leading the national debt advisory service to issue warnings that such behavior constitutes harassment and is unlawful, advising consumers to file complaints with regulatory bodies. In December 2009, MBNA acknowledged having overcharged approximately 500,000 Irish customers by as much as €18 million.

Around September 2010 in the United Kingdom, MBNA attracted scrutiny over its interpretation of new regulations mandating that credit card payments be applied first toward balances with the highest interest rates. A consumer advocacy website described MBNA’s method as a "disingenuous money-making tactic".

External links

• MBNA Limited (UK)
• bankcardservices.co.uk
• MBNA Canada
• MBNA (Archive)
• Lloyds Banking Group
• Yahoo! – MBNA Corporation Company Profile
• PBS video – Secret History of the Credit Card
• MBNA's Corporate Foundation