Item 1:
Business.
Item 1A:
Item 1A:
Risk Factors.
Item 2:
Properties.
Item 3:
Legal Proceedings.
Item 1B.
Item 1B. Unresolved Staff Comments.
Not Applicable.
Item 4.
Item 4.
Mine Safety Disclosures.
Not Applicable.
Substitute information provided in accordance with General Instruction J to Form 10-K:
Item 1112(b) of Regulation AB. Significant Obligors of Pool Assets (Financial Information).
The primary asset of BA Credit Card Trust is the collateral certificate, Series 2001-D, representing an undivided interest in BA Master Credit Card Trust II, whose assets include the receivables arising in a portfolio of unsecured consumer revolving credit card accounts. BA Master Credit Card Trust II, therefore, may be considered a significant obligor in relation to BA Credit Card Trust. Pursuant to Instruction 2.b. to Item 1112(b) of Regulation AB, the information required by Instruction J to Form 10-K in respect of BA Master Credit Card Trust II has been disclosed in this report on Form 10-K in lieu of the information otherwise contemplated by Item 1112(b).
The pool assets held by BA Master Credit Card Trust II do not include any significant obligors.
Item 1114(b)(2) of Regulation AB: Credit Enhancement and Other Support, Except for Certain Derivatives Instruments (Financial Information).
Based on the standards set forth in Item 1114(b)(2) of Regulation AB, no information is required in response to this Item.
Item 1115(b) of Regulation AB: Certain Derivatives Instruments (Financial Information).
Based on the standards set forth in Item 1115(b) of Regulation AB, no information is required in response to this Item.
Item 1117 of Regulation AB: Legal Proceedings.
Industry Developments
Bank of America, National Association (“BANA”) issues credit cards on MasterCard’s and Visa’s networks. MasterCard and Visa are subject to settlement obligations relating to certain litigations and continue to be subject to significant ongoing litigations, including class actions, and increased competition. These settlements and litigations are based on, among other things, claimed violations of United States federal antitrust laws, claims that currency conversion fees were wrongly applied on purchases of goods and services in foreign countries, and claims alleging that the interchange charged by MasterCard and Visa is impermissible. The costs associated with these settlements, litigations and other matters could cause MasterCard and Visa to invest less in their networks and marketing efforts and could adversely affect the interchange paid to their member banks, including BANA.
Litigation
In 2005, a group of merchants filed a series of putative class actions and individual actions directed at interchange fees associated with Visa and MasterCard payment card transactions. These actions, which were consolidated in the U.S. District Court for the Eastern District of New York under the caption In re Payment Card Interchange Fee and Merchant Discount Anti-Trust Litigation (Interchange), named Visa, MasterCard and several banks and bank holding companies, including Bank of America Corporation (“BAC”), as defendants. Plaintiffs alleged that defendants conspired to fix the level of default interchange rates and that certain rules of Visa and MasterCard were unreasonable restraints of trade. Plaintiffs sought compensatory and treble damages and injunctive relief.
On October 19, 2012, defendants reached a settlement with respect to the putative class actions that the U.S. Court of Appeals for the Second Circuit rejected. In 2018, defendants reached a settlement with the representatives of the putative Rule 23(b)(3) damages class to contribute an additional $900 million to the approximately $5.3 billion held in escrow from the prior settlement. BAC’s additional contribution is not material to BAC. The District Court approved that settlement with the putative Rule 23(b)(3) damages class on December 13, 2019 but that approval is being appealed.
In addition, the putative Rule 23(b)(2) class action seeking injunctive relief is pending, and a number of individual merchant actions continue against the defendants, including one against BAC. As a result of various loss-sharing agreements, however, BAC remains liable for a portion of any settlement or judgment in individual suits actions where it is not named as a defendant.
In November 2019, a lawsuit (Filer et al. v. BA Credit Card Funding, LLC et al. (No. 19-CV-1507 (W.D.N.Y. November 14, 2019)) was filed against BA Credit Card Funding, LLC (“Funding”), BA Credit Card Trust and, by and through The Bank of New York Mellon as its trustee, BA Master Credit Card Trust II. Each of Funding and BA Credit Card Trust is an affiliate of BANA, and BA Master Credit Card Trust II is a common law trust established by BANA. Each of Funding, BA Master Credit Card Trust II, and BA Credit Card Trust has acted as a special purpose entity in the BA Credit Card Trust securitization issuance platform sponsored by BANA. The putative class action was brought by certain New York residents with credit card accounts originated by BANA (which is not named as a defendant), who allege that BANA securitized their credit card receivables in BA Master Credit Card Trust II. The complaint contends that the defendants are required to comply with New York state’s usury law under the United States Court of Appeals for the Second Circuit decision in Madden v. Midland Funding, LLC, 786 F.3d 246 (2d Cir. 2015), cert. denied, 136 S. Ct. 2505 (June 27, 2016) because they are non-bank entities that are not entitled to the benefits of federal preemption applicable to loans made by BANA. The Filer action was voluntarily dismissed by the plaintiffs without prejudice on December 17, 2019 after plaintiffs’ counsel was provided evidence that the named plaintiffs lack standing to pursue that action.
Legal Proceedings Involving The Bank of New York Mellon
In the ordinary course of business, The Bank of New York Mellon, The Bank of New York Mellon Trust Company, N.A., and BNY Mellon Trust of Delaware (collectively, “BNY Mellon”) are named as a defendant in legal actions. In connection with its role as trustee of certain residential mortgage-backed securitization (“RMBS”) transactions, BNY Mellon has been named as a defendant in a number of legal actions brought by RMBS investors. These lawsuits allege that the trustee had expansive duties under the governing agreements, including the duty to investigate and pursue breach of representation and warranty claims against other parties to the RMBS transactions. While it is inherently difficult to predict the eventual outcomes of pending actions, BNY Mellon denies liability and intends to defend the litigations vigorously.
The Bank of New York Mellon has provided us with the information in the paragraph above in response to the requirements of Regulation AB. Other than the above paragraph and the information concerning The Bank of New York Mellon specified in this Form 10-K under the caption Item 1122 of Regulation AB: Compliance with Applicable Servicing Criteria and in Exhibit 33.2 to this Form 10-K, The Bank of New York Mellon has not participated in the preparation of, and is not responsible for, any other information contained in this Form 10-K.
PART II
The following Items have been omitted in accordance with General Instruction J to Form 10-K:
Item 5:
Item 5:
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Item 6:
Item 6:
Selected Financial Data.
Item 7:
Item 7:
Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Item 7A:
Item 7A:
Quantitative and Qualitative Disclosures about Market Risk.
Item 8:
Item 8:
Financial Statements and Supplementary Data.
Item 9:
Item 9:
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Item 9A:
Item 9A:
Controls and Procedures.
Item 9B:
Item 9B: Other Information.
None.
PART III
The following Items have been omitted in accordance with General Instruction J to Form 10-K:
Item 10:
Item 10:
Directors, Executive Officers and Corporate Governance.
Item 11:
Item 11:
Executive Compensation.
Item 12:
Item 12:
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Item 13:
Item 13:
Certain Relationships and Related Transactions, and Director Independence.
Item 14:
Item 14:
Principal Accountant Fees and Services.
Substitute information provided in accordance with General Instruction J to Form 10-K:
Item 1119 of Regulation AB: Affiliations and Certain Relationships and Related Transactions.
Information required by Item 1119 of Regulation AB has been omitted from this report on Form 10-K in reliance on the Instruction to Item 1119.
Item 1122 of Regulation AB: Compliance with Applicable Servicing Criteria.
Each of BANA, with respect to itself and its affiliated servicing participants, and The Bank of New York Mellon (each, a “Servicing Participant”) has been identified by the registrant as a party participating in the servicing function with respect to the pool assets held by each of BA Master Credit Card Trust II and BA Credit Card Trust. Each Servicing Participant has completed a report on assessment of compliance with the servicing criteria applicable to such Servicing Participant (each, a “Report on Assessment”), which Reports on Assessment are attached as exhibits to this Form 10-K. In addition, each of the Servicing Participants has provided an attestation report (each, an “Attestation Report”) by a registered independent public accounting firm regarding its related Report on Assessment. Each Attestation Report is attached as an exhibit to this Form 10-K. We have not independently verified the accuracy of The Bank of New York Mellon’s assertions or the related attestations of its registered independent public accounting firm.
A Servicing Participant may engage one or more vendors to perform specific and limited activities that address all or a portion of one or more servicing criteria applicable to such Servicing Participant. Each Servicing Participant indicates that it has instituted policies and procedures to monitor whether its vendors’ activities comply in all material respects with such servicing criteria, and has elected to take responsibility for assessing compliance with the servicing criteria applicable to its vendors’ activities in such Servicing Participant’s Report on Assessment.
Except as disclosed below, no Report on Assessment or related Attestation Report has identified (i) any material instance of noncompliance with the servicing criteria identified in such Report on Assessment as applicable to the related Servicing Participant or (ii) any material deficiency in such Servicing Participant’s policies and procedures to monitor vendor compliance.
Exceptions:
The Bank of New York Mellon: The Bank of New York Mellon’s Report on Assessment and the related Attestation Report prepared by KPMG LLP have identified material noncompliance with one servicing criterion applicable to The Bank of New York Mellon.
Servicing criterion 1122(d)(3)(i)(A) contemplates that reports to investors, including those to be filed with the Commission, are maintained in accordance with the transaction agreements and applicable Commission requirements. Specifically, such reports are prepared in accordance with timeframes and other terms set forth in the transaction agreements.
Noncompliance: The Bank of New York Mellon indicates that during the reporting period, certain reports to investors were not prepared in accordance with the timeframes set forth in the transaction agreements.
Remediation: The Bank of New York Mellon indicates that:
- Transaction identifiers will be verified and made uniform, as needed, between the BNY Mellon Investor Reporting website and the system that generates investor reports.
- All desktop procedures for its platform will be reviewed to make sure the correct transaction identifiers are listed for all reports that need to be made available to investors on the BNY Mellon Investor Reporting website.
- A review of the BNY Mellon Investor Reporting website will be undertaken on the relevant payment dates to verify that all pertinent reports have been successfully posted and assure any needed remediation occurs on the same date.
We have determined that none of the identified instances of noncompliance involved the servicing of pool assets held by either BA Credit Card Trust or by BA Master Credit Card Trust II.
We have not independently verified the accuracy of The Bank of New York Mellon’s assertions or the adequacy of its remediation efforts.
Platform-Level Reports:
Regulations of the SEC require that each servicing participant complete a report on assessment at a “platform” level, meaning that the transactions covered by the report on assessment should include all asset-backed securities transactions involving such servicing participant that are backed by the same asset type. Subsequent guidance from the SEC staff identifies additional parameters that a servicing participant may apply to define and further limit its platform. For example, a servicing participant may define its platform to include only transactions that were completed on or after January 1, 2006 (the effective date for Regulation AB) and that were registered with the SEC pursuant to the Securities Act of 1933. Each servicing participant is responsible for defining its own platform, and each platform will naturally differ based on various factors, including the servicing participant’s business model, the transactions in which it is involved and the range of activities performed in those transactions.
Item 1123 of Regulation AB: Servicer Compliance Statement.
BANA has been identified by the registrant as a servicer with respect to the pool assets held by each of BA Master Credit Card Trust II and BA Credit Card Trust. BANA has provided a statement of compliance with the related servicing agreement (the “Compliance Statement”), signed by an authorized officer of BANA. The Compliance Statement is attached as an exhibit to this Form 10-K.
PART IV
Item 15.
Item 15. Exhibits and Financial Statement Schedules.
(a)(1)
Not Applicable.
(a)(2)
Not Applicable.
(a)(3)
Not Applicable.
(b)
Exhibits
Exhibit Index
(c)
Not Applicable.
Item 16.
Form 10-K Summary.
Not applicable.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.