ICUL Service Corp. shows small CUs can survive in the plastic arena

NAPERVILLE, Ill. - Yes, it can be done, according to the Illinois Credit Union League Service Corp. That is even small credit unions can run successful plastic card programs-with a little help. Back in 1988 ICUL unveiled a specialized credit card program for small credit unions. "Back then the rule of thumb was that a credit union needed about 400 accounts or so to make it economically sound to have a credit card offering," said George Fiegle, executive vice president/chief operating officer of ICUL. For a small credit union, trying to come up with 400 member credit card accounts can be tough. The ICUL debuted its Apollo small credit card program, that Fiegle said, made it profitable for credit unions to run a card program with as few as 50 accounts. "The net income per account is about $11 per month," said Fiegle. The ICUL charges the CU roughly $2 per account per month. Fiegle said the $11 net income is a big deal for some small CUs. "I've had some small credit union CEOs say `hey Apollo is our bottomline'. They need that $11 a month, per account." The ICUL was able to pull off this program by finding new cost-cutting techniques. For example, for Visa and MasterCards, Apollo small CUs share BINs to save money. Other techniques include predesigned plastic cards that are cheaper to produce. Currently there are about 120 Illinois CUs on the Apollo program. "It's important here because there is such a high concentration of small credit unions," said Fiegle. Some 85% of the state's CUs have less than $20 million in assets. Fiegle said a low-cost program is only one part of the equation for small CUs. The other part is staffing, skill and time. Apollo handles all of the card administration for the credit union. "We can even do the collections if they want." Apollo was borne in Illinois, but has since branched out, and is currently in 14 other states. Other than its 120 Illinois Apollo participants, there are about another 180 in the other 14 states. "When CUNA sold their portfolio to Equifax, they had a program call MAX designed for smaller credit unions. That was not part of the purchase by Equifax. Those people needed some place to go, so we picked them up." The ICUL has since added to their small CU card programs with cuCheck for debit/ATM cards and cuCash for ATM cards only. Those programs are thriving also, said Fiegle. "What's kind of neat is that with all of these small credit union card programs we have about 500 participants. When you figure there's only 10,000 credit unions, that's a pretty good percentage." -pgentile@cutimes.com