NextCard Fires 90 Percent of Staff

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After signing an agreement with the Federal Deposit Insurance Corp. earlier this month to transfer its credit card portfolio operations to the FDIC, NextCard disclosed in a Security and Exchange Commission filing yesterday that it had fired 546 employees, or 90 percent of its staff.


About 65 people remain at the company to work with the Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency, the company said. Transferring the company's credit card portfolio to the FDIC likely would put NextCard out of business.


According to the SEC filing, NextCard will continue to provide certain administrative services for at least the next three months as part of its agreement with the FDIC.


No one from NextCard was available for comment.


The FDIC also is acting as receiver for NextCard's failed online bank, NextBank N.A. The agreement gives the FDIC uninterrupted access to NextCard's and NextBank's technology, which is necessary for the banking regulator to sell NextBank's credit card portfolio.


Banking regulators shut down NextBank in early February after they found the bank was "operating in an unsafe and unsound manner" and had substantially dissipated its assets.


NextBank also asked the Nasdaq Stock Market to delist its stock last week, saying it could not comply with the stock market's listing requirements. NextCard's shares last traded Feb. 7, closing down 5 cents at 14 cents. Nasdaq is expected to delist the company's stock on March 18.


In late 2001, NextCard tried to find a buyer for the bank and its holding company, but found no takers. In January, it notified the OCC that it could not prepare a Capital Restoration Plan and said that liquidating the bank's assets would not raise enough money to pay its obligations.


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