Washington Mutual Inc., Seattle, has agreed to buy Providian Financial, a credit card provider based in San Francisco, in a deal currently valued at $6.45 billion.Of the total, 89% would be paid in WaMu stock and the rest in cash, the company said. WaMu said Providian's emphasis on middle-market customers makes it a strategically compelling fit. Kerry Killinger, chairman and chief executive of WaMu, said in a statement that the combination "also helps to further diversify our balance sheet and earnings by adding attractive, high-yielding credit card assets, while improving our net interest margin and adding stable fee income." Providian will become the fourth business unit at WaMu and will remain in San Francisco under its current chairman and chief executive, Joseph Saunders. Providian had not always gone after middle-market customers, a report from Standard & Poor's noted. The credit card company shed its "legacy portfolio" and moved away from the deep subprime customer toward a middle- to prime-market focus. "The successful implementation of the revised strategy is evident in the progress Providian has made to date in improving asset quality metrics specifically, and more generally, overall financial performance," said John K. Bartko, credit analyst at S&P.
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A federal judge in Texas dismissed the Consumer Financial Protection Bureau's medical debt rule and prohibited states from passing their own laws prohibiting medical debt on credit reports.
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Dr. Mark Calabria takes on the additional role of chief statistician of the United States; retired Ally Bank executive Diane Morais has joined First Citizens Bancshares' board of directors; MainStreet Bank has promoted Alex Vari to chief financial officer; and more in this week's banking news roundup.
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The notes are backed by home improvement installment loans originated by approved dealers in Foundation Finance Company's network.
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