ATLANTA, Ga. – Credit Union ONE, a $702 million dollar credit union based in Ferndale, Michigan which has a strong reputation for being committed to the credit union philosophy, has sold its credit card portfolio, estimated at $33 million, to Atlanta-based InfiCorp. InfiCorp is a regular purchaser of credit union card portfolios, but generally specializes in small portfolio sizes. "We have clients with portfolios twice that size," said Keith Floen, Managing Director for Inficorp, "but $33 million is significantly higher than our average." On average, InfiCorp buys card portfolios in the $9 million dollar range, Floen said. InfiCorp's purchase of the portfolio is significant both for its size as well as for the reasons the credit union used to finally make the sale. Over a nine-month examination period, which one Credit Union ONE executive called "excruciating" the credit union decided to sell off the bulk of its card portfolio and redeploy its resources, even though the portfolio had been performing adequately. "From our perspective, we just really had to review our mission and what we were supposed to be doing and then evaluate where running our own credit card program fit into that," explained Stephen Grech, Vice President of Lending for Credit Union ONE. "It wasn't just a case of having a poorly performing credit card portfolio and feeling like we had to sell it," Grech added. As part of that different approach, the credit union decided to retain two credit union affinity card programs it has with a local medical facility and university, reducing what would have otherwise been an almost $40 million portfolio to $33 million. "When we reviewed our credit card programs we concluded that those two represented an approach that was closer to the heart of our mission, Grech explained, "so we decided not to sell those." He said that the credit union had not yet decided where precisely it would reapply the resources it had released by selling the portfolio, but he added that the credit union would definitely consider opening more branches. The credit union currently has 19 and Grech said Credit Union ONE has learned that it is in the branch connections that the credit union makes many of its most important relationships with members. Credit Union One may have taken nine months to make the tough decision to sell, Grech explained, because the staff had both used a broker to help shop the portfolio to buyers and had also approached a couple of potential buyers on their own. The credit union had wanted to explore all of its possible options, Grech said, particularly since it did not have to sell the portfolio. InfiCorp won the agent deal because the monoline issuer had been able to best give the credit union what is was looking for, a way to redeploy its resources while staying active in offering its members cards and improving those cards. Prior to the sale the credit union, which processed with Certegy, had only a 21% penetration of the cards into its almost 100,000 member base. Grech said that InfiCorp's ability to help move their cards into more members, and even nonmembers' hands, had been part of the decision. He said the credit union was also considering going to a 24/7 member service model for the cards, and decided that it could achieve that more cost effectively through InfiCorp. "We went down to Atlanta to see the operation, kick the tires and so forth," Grech said. "We took our time to get comfortable with the buyer." The state chartered credit union has an effectively statewide field of membership and Grech said the CU looked forward to offering membership in the credit union to the non-members to whom InfiCorp successfully marketed cards with its brand. The final clinching point in the decision was an awareness of how much InfiCorp needed Credit Union ONE's brand. "The InfiCorp name is not going to be really identifiable to anybody," Grech said, "but we have spent a lot of time and money and energy building our brand and we are proud of our brand." InfiCorp convinced the credit union that it needed and wanted the brand and would respect how the brand should be used, Grech added. -

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