SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest
event reported):
April 16, 2002
METRIS COMPANIES INC.
(Exact name of registrant as specified in its charter)
Delaware 1-12351 41-1849591
(State of Incorporation) (Commission File Number) (IRS Employer
Identification No.)
10900 Wayzata Boulevard, Minnetonka, Minnesota 55305
(Address of principal executive offices) (Zip Code)
(952) 525-5020
(Registrant's telephone number, including area code)
Item 5. Other Events
As reported in the Current Report on Form 8-K filed by Metris Companies Inc.
("Metris") on April 17, 2002 ("Original Form 8-K"), Direct Merchants Credit Card
Bank, N.A. ("Bank"), a wholly-owned subsidiary of Metris, on April 16, 2002
entered into an agreement with the Office of the Comptroller of the Currency
("OCC"), the agency that regulates the Bank, to strengthen certain aspects of
the safety and soundness of the Bank's operations. The agreement, filed with the
Original Form 8-K as Exhibit 99.1 and incorporated therein by reference,
formalized recommendations and requirements made by the OCC following an
examination of the Bank that covered the 15-month period ending December 31,
2001.
This current Report on Form 8-K/A amends the Original Form 8-K to add the
following disclosure to Item 5 of the Original Form 8-K regarding when the Bank
anticipates submitting and adopting its updated strategic and other compliance
plans that are required pursuant to the agreement.
The agreement required the Bank to update its Strategic Plan by July 15, 2002
(see Article VIII(1)). The Bank's Board of Directors ("Board") approved the
revisions to the Bank's Strategic Plan effective July 12, 2002. The Bank filed
the "Direct Merchants Bank Strategic Plan: 2002-2004" with the OCC on July 15,
2002. The agreement provides that a determination of supervisory non-objection
from the OCC must be received by the Bank before the revised Strategic Plan can
be fully implemented by the Bank (see Article VIII(2)). Management of the Bank
discussed the Bank's revised Strategic Plan with representatives of the OCC on
August 1, 2002. The OCC recommended that certain changes be made to the revised
Strategic Plan and extended the Bank's deadline for providing a second draft of
the plan to the OCC until August 31, 2002.
The agreement required the Bank to develop a Capital Plan by July 15, 2002 (see
Article IX(1)). The Board approved the Capital Plan effective July 12, 2002. The
Bank filed the "Direct Merchants Bank Capital Plan: 2002-2004" with the OCC on
July 15, 2002. The agreement provides that a determination of supervisory
non-objection from the OCC must be received by the Bank before the Capital Plan
can be fully implemented by the Bank (see Article IX(5)). Management of the Bank
discussed the Bank's Capital Plan with representatives of the OCC on August 1,
2002. The OCC recommended that the Bank make certain changes to the Capital Plan
and extended the Bank's deadline for providing a second draft of the plan to the
OCC until August 31, 2002.
The agreement required the Bank to adopt a written action plan to address issues
identified in the Oversight Committee's evaluation of the Bank's credit risk
management personnel, policies, processes, and control functions (see Article
IV(5)). The Oversight Committee completed its evaluation on July 8, 2002. The
Board approved the evaluation on July 10, 2002 and delivered it to the OCC for
review on July 15, 2002. The Board approved the action plan on August 9, 2002,
and the Bank filed the action plan with the OCC on August 13, 2002. The
agreement requires the action plan to be implemented by the Bank within 30 days
after it is received by the OCC.
The agreement required the Bank to adopt a written action plan to address issues
identified in management's evaluation of issues that impact borrowers' ability
to make progress on reducing debt and possible causes for negative amortization
(see Article IV(5)). Management completed this evaluation on July 8, 2002 The
Board approved the evaluation on July 9, 2002 and delivered it to the OCC for
review on July 15, 2002. The Board approved the action plan on August 9, 2002,
and the Bank filed the action plan with the OCC on August 13, 2002. The
agreement requires the action plan to be implemented within 30 days after it is
received by the OCC.
The agreement required the Bank to adopt a written action plan detailing the
Board's strategy to evaluate and address the impact of the automated 2001 Credit
Line Increase program on delinquencies and loan losses (see Article V(2)). The
Board adopted the action plan on May 13, 2002 and delivered it to the OCC on May
14, 2002, for a determination of supervisory non-objection. The OCC advised the
Bank, in a letter dated June 13, 2002, that the OCC posed "no objection to the
implementation of this plan." The Bank implemented the action plan on June 13,
2002.
The agreement required the Bank to adopt a written action plan detailing the
Board's strategy for strengthening controls and improving management information
systems for accounts placed in Debt Forbearance Programs and Re-age Programs
(see Article VI(1)). The Board adopted the action plan on July 12, 2002 and
delivered it to the OCC on July 15, 2002, for a determination of supervisory
non-objection. The agreement requires the OCC to provide its determination of
supervisory non-objection within 30 days after the action plan is received by
the OCC. The agreement requires the action plan to be implemented immediately
upon receiving the OCC's determination of supervisory non-objection.
The agreement required the Bank to adopt a written action plan designed to
ensure the effective operation and financial reporting of all aspects of the
Debt Waiver Products (see Article VII(1)). The Board adopted the action plan on
May 13, 2002 and delivered it to the OCC on May 15, 2002, for a determination of
supervisory non-objection. The OCC advised the Bank, in a letter dated June 13,
2002, that the OCC posed "no objection to the implementation of this plan." The
Bank implemented the action plan on June 13, 2002.
The agreement required the Bank to adopt a Contingency Funding Plan (see Article
XII(4)). The Board adopted the Contingency Funding Plan ("CFP") on May 13, 2002,
and delivered it to the OCC on May 15, 2002, for a determination of supervisory
non-objection. The OCC acknowledged that the Bank was working with the OCC to
make improvements to the CFP, and advised the Bank, in a letter dated June 13,
2002, that the final version of the CFP should be delivered to the OCC no later
than July 15, 2002. The Board approved revisions to the CFP on June 28, 2002,
and delivered the final version of the CFP to the OCC on July 1, 2002. The OCC
advised the Bank, in a letter dated July 15, 2002, that it posed "no objection
to the CFP." The Bank implemented the CFP on July 15, 2002.
The agreement required the Bank to adopt a written action plan for evaluating
the adequacy of policies, procedures, and control processes in place in the
individual business units, and additional risk management functions (see Article
XIII(2)). The Board adopted the action plan on June 10, 2002, and delivered it
to the OCC for review on June 14, 2002. The OCC advised the Bank, in a letter
dated July 15, 2002, that the OCC will monitor the actions of the Project and
Process Management unit and the Bank's compliance with Article XIII on an
ongoing basis. The action plan was implemented by the Bank on June 10, 2002.
Item 7. Financial Statement and Exhibits
(c) Exhibits
99.1 Agreement between Direct Merchants Credit Card Bank, N.A. and the Office of
the Comptroller of the Currency, dated April 16, 2002 (incorporated by reference
to Exhibit 99.1 to Metris Companies Inc.'s Current Report on 8-K dated April 17,
2002 (File No.
1-12351))
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
METRIS COMPANIES INC.
By /s/ Ronald N. Zebeck
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Ronald N. Zebeck
Chairman and Chief Executive Officer
Dated: October 22, 2002