Portfolios Can Gum Up the Mergers Works, Execs Say
Too many merging credit unions disregard credit and debit card portfolios in their merger negotiations and preparations and this can result in needless expense and member problems, according to credit union and CUSO executives.
“Let’s face it, few credit unions merge because of a credit card portfolio,” remarked Stephanie Davis, vice president for member relations at the 72,000-member $685 million First Community Federal Credit Union. “Usually there are much bigger strategic and practical questions on the table if credit unions are talking about merging. But at the same time, cards are such high-touch and complicated products that they really need to be considered earlier in the whole merger discussions.”
“In general, think it’s really important to bring the core processor into the card conversion discussion very early,” Davis said, adding that the core processor plays a key role in how the overall merger and associated conversions are scheduled and sequenced. Additional considerations can include cleaning up the incoming card portfolio to make sure the accounts there are all live accounts as well as looking at processing contracts to see how they handle these sorts of circumstances. Keeping on deadline and maintaining very strong member communication are also crucial parts of the picture, she added.
These last two need special attention because neglecting either one can have very expensive and troubling results.