BOSTON -- The $125 million Taunton Federal Credit Union, headquartered in Taunton, Mass., has sold its card portfolio to Elan Financial Services, a subsidiary of US Bank. The purchase brings Elan a portfolio of 2,500 accounts worth roughly $3.4 million.
"We had a couple of choices in front of us," says John Damaso, CEO, Taunton Federal Credit Union. "We could upgrade our credit card program on our own, or we could sell our portfolio outright. Neither option was appealing on its own. Once we realized that a partnership with Elan would provide the best of both worlds, a world class program to our members in our name and an attractive premium for our portfolio, it was an easy decision for us to choose Elan."
Damaso explained that the CU's card program had penetrated 35% into the CU's membership and Taunton doubted whether they could grow the program enough to have the economies of scale sufficient to offer the members rewards and other benefits that members had said they wanted.
Damaso said Elan had agreed to continue to manage the portfolio in terms of interest rates, fees and policies much in the way that the CU had "for a time", but added that he was not sure how long that would be. The CU will continue to manage the day-to-day workings of the portfolio until sometime in 2007, Damaso added.