EXHIBIT 99.18
Report of Independent Accountants
First USA Bank
Three Christina Centre
201 North Walnut Street
Wilmington, Delaware 19801
and
The Bank of New York (Delaware)
c/o The Bank of New York
101 Barclay Street, Floor 12E
New York, New York 10286
First USA Credit Card Master Trust Series 1996-2
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We have examined management's assertion that First USA Bank (the Bank), a wholly
owned subsidiary of First USA Financial, Inc. which is a wholly owned subsidiary
of First USA, Inc., maintained control structure policies and procedures over
the functions performed as Servicer of the First USA Credit Card Master Trust
Series 1996-2 (the Trust) that are effective, as of June 30, 1996, in providing
reasonable assurance that Trust assets are safeguarded against loss from
unauthorized use or disposition and that transactions are executed in accordance
with management's authorization in conformity with the Pooling and Servicing
Agreement (the Agreement) dated as of September 1, 1992, and the Series 1996-2
Pooling and Servicing Agreement Supplement dated June 4, 1996 (together the
Agreements), between the Bank as Transferor and Servicer, and The Bank of New
York (Delaware), as Trustee on behalf of the Certificateholders of the Trust,
and are recorded properly to permit the preparation of the required financial
reports. This assertion is included in the accompanying report of management
titled, "Report of Management on Credit Card Trust Control Structure Policies
and Procedures and Pooling and Servicing Agreement Compliance" (the Report).
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants, and accordingly, included
obtaining an understanding of the control structure policies and procedures over
the functions performed by the Bank as Servicer of the Trust, testing and
evaluating the design and operating effectiveness of the policies and
procedures, and such other procedures as we considered necessary in the
circumstances. We believe that our examination provides a reasonable basis for
our opinion.
As discussed in the Report, management, in providing its assertion on the
control structure policies and procedures, assumed the accuracy of reports
prepared by the Bank's third party credit card processor and did not extend its
assessment to the control structure policies and procedures of the Bank's third
party credit card processor. Accordingly, and in accordance with Section 3.06(a)
and (b) of the Agreement, our examination did not extend to the control
structure policies and procedures of the Bank's third party credit card
processor, and we do not express an opinion or any other form of assurance on
those control structure policies and procedures.
Because of inherent limitations in any control structure policies and
procedures, errors or irregularities may occur and not be detected. Also,
projections of any evaluation of the control structure policies and procedures
over the functions performed by the Bank as Servicer of the Trust to future
periods are subject to the risk that the policies and procedures may become
inadequate because of changes in conditions or that the degree of compliance
with the policies or procedures may deteriorate.
In our opinion, management's assertion that the Bank maintained control
structure policies and procedures over the functions performed as Servicer of
the Trust that are effective, as of June 30, 1996, in providing reasonable
assurance that Trust assets are safeguarded against loss from unauthorized use
or disposition and that transactions are executed in accordance with
management's authorization in conformity with the Agreements between the Bank as
Transferor and Servicer and The Bank of New York (Delaware), as Trustee, on
behalf of the Certificateholders of the Trust, and are recorded properly to
permit the preparation of the required financial reports, is fairly stated, in
all material respects, based upon the following criteria specified in the
Report:
- - Policies and procedures provide reasonable assurance that funds collected are
appropriately remitted to the Trustee in accordance with the Agreements.
- - Policies and procedures provide reasonable assurance that the addition of
Accounts to the Trust are authorized in accordance with the Agreements.
- - Policies and procedures provide reasonable assurance that the removal of
Accounts from the Trust are authorized in accordance with the Agreements.
- - Policies and procedures provide reasonable assurance that Trust assets
amortizing out of the Trust are calculated in accordance with the Agreements.
- - Policies and procedures provide reasonable assurance that daily Trust reports
are prepared and contain all required information in accordance with the
Agreements.
- - Policies and procedures provide reasonable assurance that monthly Trust
reports generated in the form of "Exhibits" contain all required information
per section 5.02 of the Agreements.
- - Policies and procedures provide reasonable assurance that the Annual
Servicer's Certificates are delivered to the Trustee in accordance with the
Agreements.
- - Policies and procedures provide reasonable assurance that the amount of
Investor Charge-Offs are calculated in accordance with the Agreements.
- - Policies and procedures provide reasonable assurance that the payments to
Certificateholders are made by the Trustee in accordance with the Agreements.
This report is intended solely for the information and use of the board of
directors and management of the Bank and should not be referred to or
distributed for any purpose to anyone who is not authorized to receive such
information, as specified in the Agreement. However, this report is a matter of
public record, as a result of being included as an exhibit to the annual report
on Form 10-K prepared by the Bank and filed with the Securities and Exchange
Commission on behalf of First USA Credit Card Master Trust Series 1996-2, and
its distribution is not limited.
/s/ Ernst & Young LLP
July 17, 1996
Report of Independent Accountants
First USA Bank
Three Christina Centre
201 North Walnut Street
Wilmington, Delaware 19801
and
The Bank of New York (Delaware)
c/o The Bank of New York
101 Barclay Street, Floor 12E
New York, New York 10286
First USA Credit Card Master Trust Series 1996-2
------------------------------------------------
We have examined management's assertion that First USA Bank (the Bank), a wholly
owned subsidiary of First USA Financial, Inc., which is a wholly owned
subsidiary of First USA, Inc., complied with the covenants and conditions of
Sections 2.06, 2.07, 3.01(b), 3.04(a) and (b), 3.05, 3.06(a) and (b), and 4.03,
of the Pooling and Servicing Agreement dated as of September 1, 1992 (the
Agreement), and Sections 4.09, 4.12, and 5.02 of the Series 1996-2 Pooling and
Servicing Agreement Supplement dated June 4, 1996 (together the Agreements),
between First USA Bank and The Bank of New York (Delaware), as of June 30, 1996,
and for the period from June 4, 1996 to June 30, 1996, included in the
accompanying report by management titled, "Report of Management on Credit Card
Trust Control Structure Policies and Procedures and Pooling and Servicing
Agreement Compliance" (the Report). Management is responsible for the Bank's
compliance with those requirements. Our responsibility is to express an opinion
on management's assertion about the Bank's compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about the Bank's compliance with those
requirements and performing such other procedures as we considered necessary in
the circumstances. We believe that our examination provides a reasonable basis
for our opinion. Our examination does not provide a legal determination of the
Bank's compliance with specified requirements.
As discussed in the Report, management, in providing its assertion on
compliance, assumed the accuracy of the reports prepared by the Bank's third
party credit card processor and did not extend its assessment to the relevant
aspects of the Bank's
compliance that are the responsibility of the third party credit card processor.
Accordingly, and in accordance with Section 3.06(a) of the Agreement, our
examination did not extend to those aspects of the Bank's compliance that are
the responsibility of the third party credit card processor, and we do not
express an opinion or any other form of assurance on those compliance aspects.
In our opinion, management's assertion that the Bank was in compliance with the
covenants and conditions of the sections in the Agreements referred to above, as
of June 30, 1996, and for the period from June 4, 1996 to June 30, 1996, is
fairly stated, in all material respects.
This report is intended solely for the information and use of the board of
directors and management of the Bank and should not be referred to or
distributed for any purpose to anyone who is not authorized to receive such
information as specified in the Agreement. However, this report is a matter of
public record as a result of being included as an exhibit to the annual report
on Form 10-K prepared by the Bank and filed with the Securities and Exchange
Commission on behalf of First USA Credit Card Master Trust Series 1996-2, and
its distribution is not limited.
/s/ Ernst & Young LLP
July 17, 1996