Discover Bank sold all credit cards to a Trust

[seeker]

Having read the document at the link, it is my conclusion that this is a Pass-through Trust -- you know, like they use for money laundering??LOL

It does not say that the debt has been sold, only allocated to a different "account" if you will --- no different that you setting up a Trust and transferring your assets to it -- Morgan Stanley is the Trustee, from all appearances and the wholly own Discover, etc al Discover Bank, Discover Card Servces, etc. And if you read it in it's entirity, the Trust was establish in 1993 -- so this ain't news.

However, if you can show, as in my case with a CRA report, a statement the "this account has been purchased by another lender" -- then you have cause for investigation!



Seeker

ok, if i read you right Discover is a Trustee.



this makes them an "owner" of the assets of the trust if i'm not mistaken while they are being held for the beneficiaries.



this means then they are still 1st party to any "debt" and not 3rd party.



please correct me if i am wrong.



jon

[seeker]

Morgam Stanley owns Discover -- they are the primary name on this trust -- at no time does it say they were sold, only transferred to the trust, so they could offer shares of the trust, which at this time seem to be wholly owned, again, by Morgan Stanley -- they do this to confuse -- as Victoria-Joy said -- "Watch My hands....."



Seeker

Rushpat,



I don't know. I think they do still own it, but in what capacity, I don't know. The money magicians seem to be doing some pretty neat work here. Here are a couple excerpts from Citibank (South Dakota) prospectus regarding their CC acounts receivable, and a link for those interested:



http://www.sec.gov/Archives/edgar/da...011/d424b5.htm



THE CREDIT CARD BUSINESS OF CITIBANK (SOUTH DAKOTA)



General



Citibank (South Dakota) is the master trust servicer as well as the owner of all of the credit card accounts designated to the master trust. Citibank (South Dakota) services credit card accounts at its facilities in Sioux Falls, South Dakota, and through affiliated credit card processors pursuant to interaffiliate service contracts. "



And in another portion of the prospectus it says:



Citibank Credit Card Master Trust I is a New York common law trust formed by Citibank (South Dakota) and Citibank (Nevada) in May 1991 to securitize a portion of their portfolios of credit card receivables. The master trust is operated pursuant to a pooling and servicing agreement among Citibank (South Dakota), as seller and servicer, Citibank (Nevada), as seller, and Deutsche Bank Trust Company Americas (formerly Bankers Trust Company), as trustee.



The Banks have acquired, and may acquire in the future, credit card receivables in accounts owned by their affiliates and transfer those receivables to the master trust. In addition, other affiliates of the Banks may in the future sell credit card receivables to the master trust by becoming additional sellers under the pooling and servicing agreement.



The master trust does not engage in any activity other than acquiring and holding trust assets and the proceeds of those assets, issuing series of investor certificates, making distributions and related activities.



Master Trust Assets



The master trust assets consist primarily of credit card receivables arising in a portfolio of revolving consumer credit card accounts, and collections on the accounts. The Banks sell and assign the credit card receivables to the master trust. The receivables arise in accounts that are generated under MasterCard International or VISA programs. The accounts are originated by Citibank (South Dakota) or one of its affiliates or purchased from other credit card issuers.



Citibank (South Dakota) is the owner of all of the credit card accounts designated to the master trust, but has sold a participation in the credit card receivables in some of the accounts to Citibank (Nevada) before their conveyance to the master trust.



END OF EXCERPTS



So what to make of this? I have no idea right now...



Seeker,



Does a transfer exclude a sale? Or does it inlcude?



-squirrels

[vanton57]

All they did was transfer it into their trust account and then they sell shares against the trust account. This way they can make even more off of the debt.



No where did they "Sell" the debt. They are still holding the "paper" allegedly.



Another way of looking at it is they moved it from their checking account to a mutual fund so they can earn money off of it.

vanton57,



Is there still a trust relationship where the settlor retains legal and equitable control (ownership) of the trust assets and still receives the benefits? Something has to be given up to create the trust. What is it?



Can you also help reconcile the sentence in my post above in the beginning that states that Citibank is both a "seller and a servicer"; and in the last couple paragraphs regarding banks "selling" the accounts receivable to the trust?



-squirrels

[seeker]

It's called 'paper shuffling' and that is about all it is. I still say it looks remarkably similar to money laundering! From A to B over to C, but ultimately all into the coffers of A, because A owns B who controls C, etc -- it's designed to confuse and confound -- and it gives you a headache tryingto follow it.



Transfering be/tween accounts does not include a sale -- like vanton said, it's a transfer of assets to get the most return -- selling STOCK/SHARES in the TRUST, not the actual accounts or paper -- do you understand the difference? And most times the shares are not offered publicly, but held by various "holding'companies, trusts etc. This is the theory of many who encourage each of us to protect our ass == ets -- by burying them so deep that no one knows who ultimately benefits from the things!

Maybe we should each set up a Trust, then start crossing over to each other --I have a trust which is held by, say, Vanton, Vanton's trust is held by Jerseee's trust and Jerseee's trust is held by Ice's trust and -- you get the picture? then the whole thing is held by some offshore company with each beneficiary of each trust having a foreign holding account for any 'profits' -- In my feeble undestanding of a trust, the beneficiary and the Trustee should NOT be the same, but if you are the benficiary, you get the profits, but the trustee is holder --

Just some idle thoughts bouncing in my brain -- ways to protect -- etc.

Seeker

Seeker,



If a transfer of accounts does not or cannot include a sale, how do you reconcile the words "sale" and "seller" in my post above? It says right there that Citibank (South Dakota) and Citibank (Nevada) are both sellers in an agreement that includes only one other party, the Trustee! What is it they are selling then if it is not the accounts receivables, when those are the ("primary" in their words, but the truth is probably the word "only") assets in the trust? This question has still been left unanswered or, er, "unreconciled," if that is a word. My studies have shown that a transfer, in general, DOES include a sale. Why would the definition of transfer exlude a sale in this context? Is this an assumption you are making or do you know this for certain? Do you have enough experience in this field to know otherwise of this certainty that a sale of the accounts receivable, or other legal or entitlement rights interests of the accounts receivables did not occur? Something is being sold between the three parties!!! What is it?



And yes, I do understand the interests being sold are those of the trust in the form of uncertificated securities to its (private) investors, all held by the Depository Trust Corporation, and it is not the accounts receivables themselves being sold upon securitization (or as you called it, "paper shuffling") of the accounts receivables. There is no conceptual confusion here.



There is also still the problem of the trust. Something has to be given up in order to create a trust, otherwise there never was a trust. So, what is it?



vanton57, your 2 cents?



-squirrels