$12 billion credit card charge may be imposed on Bank of America

Bank of America can possibly be subjected $12 billion pretax charge in the first quarter of 2010 in accordance with credit card losses accounting rule. 

The charge, named as "accounting adjustment" that is "one-time in nature", refers to $150 billion of credit card receivables, home equity securitizations and asset-backed conduits that will move onto the largest BofA's balance sheet, stated an analyst at Keefe, Bruyette & Woods Jefferson Harralson. He also said that a majority of the assets at issue have been included in the bank's regulatory capital ratios since the first quarter of 2008.

The largest US bank’s credit card unit lost $1.62 billion in the second quarter, that reflected overall net income for the three-month period to be limited to $3.22 billion.

Kenneth Lewis said new credit card rules in 2010 could cut card income by $700 million.

Same thing Jamie Dimon, CEO of JPMorgan Chase, predicts for his bank. 

Harralson lowered his 2009 and 2010 earnings forecast for BofA, yet maintained his "outperform" rating and 12-month price target of $16.50.