Credit Unions Continuing to Sell Card Portfolios

With its latest purchase of credit card portfolios from five credit unions, TNB Card Services is now issuing credit cards for more than 90 credit unions. Its latest acquisitions bring the number of cards TNB issues to more than 70,000.

The newly acquired card portfolios, from credit unions in three states, were purchased from LampCo Federal Credit Union of Anderson, Indiana; Lynn Postal District Employees Credit Union of Lynn, Massachusetts; T&P Federal Credit Union of Big Spring, Texas and Corpus Christi Postal Employees Credit Union and NCE Credit Union of Corpus Christi, Texas.

?Over the summer we saw a marked increase in the number of credit unions that are interested in selling their card portfolios,? said Jay Kurian, first senior vice president of TNB Card Services. ?Many credit unions chose to sell their portfolios so they could offer their members a stronger and more competitive card product.?

The increased cost of bond insurance and fraud risk is what drove Lampco Federal Credit Union to sell its card portfolio. ?Although we haven?t had any fraud losses, we were concerned about the growing cost to manage the risk,? said Dan Wininger, president of Lampco FCU. ?We also realized we could not offer products that could effectively compete against national issuers.?

The 14,000-member credit union was originally employee chartered, serving GM employees. Today, the credit union offers membership to anybody who lives, works or worships within Madison County, Indiana. The credit union has assets of $65 million and two full service branches.

Lynn Postal District Employees Credit Union of Lynn, Massachusetts, also sold its portfolio to TNB. The 2,100 member organization has assets of $13 million. Since 1926 the credit union has served postal employees and their families in Essex County.

T&P Federal Credit Union, chartered in 1947, serves employees and their families of several organizations and the community of Nolan County, Texas. With two offices, approximately 60 miles apart, the 2,050-member credit union has assets of $9 million. Formerly known as Big Spring District T&P, the credit union changed its name when it opened an office in Sweetwater to avoid creating a conflict between the two rival cities? football teams.

Corpus Christi Postal Employees Credit Union is the oldest credit union in this Texas coastal city. With 2,257 members, the credit union has two branches and serves postal employees and their families in the Corpus Christi and Nueces County area. The credit union has assets of $9.5 million.

Mark Rasmussen, president of the credit union, noted that ?We are now able to offer our members a better card product. Before we sold the portfolio, we were only able to offer a Gold and Classic card. Now we can compete, without the associated risk.?

Also in Corpus Christi, Texas, NCE Credit Union has 1,200 members and assets of $3 million. ?Because of the size of our card program and member base it became too expensive for us to offer a credit card. However, we feel it is necessary to offer a card,? said Veronica Mahzoon-Hagheghi, president. ?With TNB we know our members will be treated well and have a better product to meet their needs.?