U.S. Bad-Loan Rule Change Could Hit Bank of America
Most large banks already have complied with stricter federal rules for classifying consumer bad loans, but a few notable names haven't. These include Bank of America (BAC Quote), where full adoption of the tough new standards could cause further deterioration of credit-quality indicators in its consumer finance division.
Other big financial institutions that have yet to implement the guidelines are Citigroup (C Quote) and Chase Manhattan (CMB Quote). However, these two aren't showing anywhere near the same level of past-due loans in their consumer businesses as Bank of America.
When implemented, the new rules have forced some banks, including KeyCorp (KEY Quote) and Bank One (ONE Quote), to book significantly more bad loans in their retail businesses, which include credit cards, mortgage loans and other types of installment-based consumer loans.
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