Capital One Accounting Gimmick

Capital One Financial Corp, an issuer of MasterCard and Visa credit cards, said on Friday U.S. credit card defaults fell in April, beating analyst expectations, as the company changed its customer bankruptcy accounting.

[...] In a regulatory filing, the company said the annualized net charge-off rate for U.S. credit cards -- debts the company believes it will never collect -- fell to 8.56 percent in April from 9.33 percent in March. Under the accounting change, Capital One is waiting longer to declare the debts of bankrupt customers uncollectible.

Great American Short: COF

I am officially bearish on Capital One.

Big lenders — like American Express, Bank of America, Citigroup and even the retailer Target — have begun tightening standards for applicants and are culling their portfolios of the riskiest customers. Capital One, another big issuer, for example, has aggressively shut down inactive accounts and reduced customer credit lines by 4.5 percent in the second quarter from the previous period, according to regulatory filings.

Too little, too late?