TMG Financial Services, the card issuing and investment CUSO affiliated with The Members Group in Des Moines, Iowa, is celebrating five years of purchasing credit union credit card portfolios and providing credit unions with an investment opportunity in cards.
Over these years, the CUSO reported becoming a top 75 card issuer with more than 60,000 accounts with $125 million in balances.
The CUSO issues almost all its cards in agent relationships with the credit unions that sold the portfolios.
“There have been many ups and downs in the past five years, but overall, it has been satisfying to build a business that clearly meets the needs of many financial institutions,” said Jeff Russell, CEO of TMG Financial Services.
“From a conventional standpoint maybe 2007 wasn’t the right time to start a credit card company, as we began a slide into one of the most tumultuous economic times in a generation. For our partners, it was exactly the right time. Never in the history of our industry was expertise and perseverance (so) needed in the credit card business," Russell said.
The CUSO purchased the portfolios with money it gained, in part, from a program called the Collateralized Advance Program. The CAP program provided investing credit unions the ability to earn an above-market yield while having the protection of a loan backed by a high-quality asset pool – all while advancing the credit union industry, TMG Financial Services said.
Since 2007, TMG Financial Services has raised more than $100 million in CAP funds across the 60-plus program participants, the CUSO reported, and CAP partners have received more than $13 million in income from their involvement in the program.