Item 1. Business.
Item 1A.
Item 1A. Risk Factors.
Item 2. Properties.
Item 3. Legal Proceedings.
Item 4. Mine Safety Disclosures.
Item 1B.
Item 1B. Unresolved Staff Comments.
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 assets of the Chase Issuance Trust include a collateral certificate, Series 2002-CC (the “First USA Collateral Certificate”), representing an undivided interest in the assets of the First USA Credit Card Master Trust (the “First USA Master Trust”), whose assets include credit card receivables arising in consumer revolving credit card accounts owned by Chase Bank USA, National Association (“Chase USA”). The First USA Collateral Certificate represents less than 1% of the Chase Issuance Trust asset pool. The First USA Master Trust should not be considered a significant obligor in relation to the Chase Issuance Trust under Item 1112(b) of Regulation AB. Nevertheless, the information required by General Instruction J to Form 10-K for an asset-backed issuer in respect of the First USA Master Trust has been disclosed in this report on Form 10-K.
None of the pool assets held by the Chase Issuance Trust other than collateral certificates, and none of the pool assets relating to the First USA Master Trust include any significant obligors.
Item 1114(b)(2) of Regulation AB: Credit Enhancement and Other Support, Except for Certain Derivatives Instruments (Financial Information).
Not Applicable.
Item 1115(b) of Regulation AB: Certain Derivatives Instruments (Financial Information).
Not Applicable.
Item 1117 of Regulation AB: Legal Proceedings.
Industry Litigation
On June 22, 2005, merchants filed a putative class action complaint in the U.S. District Court for the District of Connecticut. The complaint alleges that VISA, MasterCard and certain member banks including Bank of America, Chase USA, Capital One, Citibank and others, conspired to set the price of interchange in violation of Section 1 of the Sherman Act. The complaint further alleges tying/bundling and exclusive dealing. Since the filing of the Connecticut complaint, other complaints were filed in different U.S. District Courts challenging the setting of interchange, as well the associations’ respective rules. The Judicial Panel on Multidistrict Litigation consolidated the cases in the Eastern District of New York for pretrial proceedings. An amended consolidated complaint was filed on April 24, 2006 which added claims relating to off line debit transactions. Defendants filed a motion to dismiss all claims that pre-date January 1, 2004. The Court granted that motion and those claims were dismissed.
Plaintiffs filed a first supplemental complaint in May 2006 alleging that the MasterCard offering violated Section 7 of the Clayton Act and Section 1 of the Sherman Act and that the offering was a fraudulent conveyance. Defendants filed a motion to dismiss both of those claims. On November 25, 2008, the District Court dismissed the supplemental complaint with leave to replead.
In May 2008, the plaintiffs filed a motion seeking class certification which defendants opposed. The court has not ruled on the class certification motion.
In January 2009, the plaintiffs filed and served a Second Amended Consolidated Class Action Complaint against all defendants and an amended supplemental complaint challenging the MasterCard IPO making antitrust claims similar to those that were dismissed previously. With respect to the Visa IPO, the plaintiffs filed a supplemental complaint challenging the Visa IPO on antitrust theories parallel to those articulated in the MasterCard IPO pleading.
On March 31, 2009, defendants filed a motion to dismiss the Second Amended Consolidated Class Action Complaint. Separate motions to dismiss each of the supplemental complaints challenging the MasterCard and Visa IPOs were also filed. Plaintiffs and defendants also have fully briefed and argued their motions for summary judgment. None of these motions have been decided.
In October 2012, Visa, Inc., its wholly owned subsidiaries Visa U.S.A. Inc. and Visa International Service Association, MasterCard Incorporated, MasterCard International Incorporated and various United States financial institution defendants, including Chase USA and several of its affiliates and certain predecessor institutions, entered into a settlement agreement (the “Settlement Agreement”) to resolve the United States merchant and retail industry association plaintiffs’ (the “Class Plaintiffs”) claims in the multi-district litigation(“MDL 1720”). On November 27, 2012, the court entered an order preliminarily approving the Settlement Agreement, which provides, among other things, for a $6.05 billion cash payment to the Class Plaintiffs, an amount equal to ten basis points of credit card interchange for a period of eight months to be measured from a date within sixty days of the end of the opt-out period. The Settlement Agreement also provides for modifications to each of the network’s no-surcharge rules, which are effective as of January 27, 2013.
The terms of the Settlement Agreement are subject to review and final approval by the court. The timing of the settlement’s final approval is uncertain. As a result, at this time Chase USA cannot determine the impact of the settlement on the issuing entity or any of its notes; however, Chase USA does not believe that the proposed settlement will affect the payment of principal or interest by the issuing entity on its notes.
Other Litigation
A number of lawsuits seeking class action certification have been filed in both state and federal courts against Chase USA. These lawsuits challenge certain policies and practices of Chase USA’s credit card business. A few of these lawsuits have been conditionally certified as class actions. Chase USA has defended itself against claims in the past and intends to continue to do so in the future. While it is impossible to predict the outcome of any of these lawsuits, Chase USA believes that any liability that might result from any of these lawsuits will not have a material adverse effect on the credit card receivables.
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 Accounting 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 Chase USA, as the servicer for each of the Chase Issuance Trust and the First USA Master Trust and BNY Mellon Trust of Delaware (“BNY”), as the First USA Master Trust trustee, and Wells Fargo Bank, National Association (“Wells Fargo”), as the indenture trustee for the Chase Issuance Trust (each, a “Servicing Participant”) was a party participating in the servicing function during the reporting period with respect to the pool assets held by the respective trust. Each of the Servicing Participants has completed a report on an assessment of compliance with the servicing criteria applicable to such Servicing Participant (each, a “Report on Assessment”) during the respective trust’s fiscal year ending December 31, 2012, 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.
In Schedule A of the Report on Assessment of Wells Fargo, attached as Exhibit 33.2 of this Form 10-K, Wells Fargo identifies two material instances of noncompliance with the servicing requirements of Item 1122 of Regulation AB. In Schedule B of Exhibit 33.2 of the Form 10-K, Wells Fargo says that the errors that led to its determination that material instances of noncompliance had occurred were “limited to certain RMBS transactions in the [p]latform” and that with respect to “non-RMBS transactions in the
[p]latform” no such errors were identified that contributed to Wells Fargo’s determination that there were material instances of noncompliance.
The material instances of noncompliance disclosed by Wells Fargo did not occur with respect to any securities or transactions of the Chase Issuance Trust, and the reported instances of noncompliance were isolated to other products issued by other entities serviced on Wells Fargo’s servicing platform. Chase USA acts as servicer for the Chase Issuance Trust and is responsible for the calculation of amounts allocated to the noteholders of the Chase Issuance Trust and the reporting of those amounts. Thus, the instances of Wells Fargo’s noncompliance specified in Schedule A of Exhibit 33.2 are not applicable to the credit card receivable-backed securities issued by the Chase Issuance Trust.
In Schedule A of the Report on Assessment of BNY, attached as Exhibit 33.3 of this Form 10-K, BNY identifies two material instances of noncompliance with the servicing requirements of Item 1122 of Regulation AB. In the annual certification provided to Chase USA by BNY, as the First USA Master Trust trustee, BNY states that the instances of noncompliance noted in its Report on Assessment “relate to a securitization of manufactured housing receivables and do not relate to” the First USA Master Trust.
The material instances of noncompliance disclosed by BNY did not occur with respect to any securities or transactions of the First USA Master Trust, and the reported instances of noncompliance were isolated to other products issued by other entities serviced on BNY’s servicing platform. Thus, the instances of BNY’s noncompliance specified in Schedule A of Exhibit 33.3 are not applicable to the credit card receivable-backed securities issued by the First USA Master Trust.
Item 1123 of Regulation AB: Servicer Compliance Statement.
Chase USA is the servicer and has provided a statement of compliance (a “Compliance Statement”) for the period from and including January 1, 2012 through and including December 31, 2012 for each of the Chase Issuance Trust and the First USA Master Trust. Each such Compliance Statement has been signed by an authorized officer of the servicer for the respective issuing entity and is attached as an exhibit to this Form 10-K.
PART IV
Item 15.
Item 15. Exhibits, Financial Statement Schedules.
(a)(1) Not Applicable.
(a)(2) Not Applicable.
(a)(3) See Item 15(b) below.
(b) Exhibits Required by Item 601 of Regulation S-K
35.1
Servicer Compliance Statement of Chase USA as servicer for the Chase Issuance Trust.
35.2
Servicer Compliance Statement of Chase USA as servicer for the First USA Master Trust.
(c)
Not applicable
SUPPLEMENTAL INFORMATION TO BE FURNISHED WITH REPORTS FILED PURSUANT TO SECTION 15(d) OF THE ACT BY REGISTRANTS WHICH HAVE NOT REGISTERED SECURITIES PURSUANT TO SECTION 12 OF THE ACT.
No annual report to security holders or proxy statement, form of proxy or other proxy soliciting material has been sent to security holders or is anticipated to be furnished to security holders subsequent to the filing of this annual report on Form 10-K.
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.
CHASE ISSUANCE TRUST/
FIRST USA CREDIT CARD MASTER TRUST
(Issuing entities)
Date: March 29, 2013
By:
CHASE BANK USA, NATIONAL ASSOCIATION,
as Depositor
/s/ David A. Penkrot
Name:
David A. Penkrot
Title:
Senior Vice President
(senior officer of Chase Bank USA, National Association in charge of securitization)