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PORTLAND, Ore. – Can selling a card portfolio actually be good for credit union growth? Asset Exchange, a leading broker of credit union credit card portfolios has released a private study in which it suggests that credit unions that sell their card portfolios have higher membership and loan growth than credit unions that don’t. The study used public-domain NCUA data in an analysis of approximately 2,400 credit unions that held credit card portfolios of over $1 million in 2000. The study found average credit union membership grew about 8% from December 2000 to December 2003 among credit unions that sold their card portfolios, versus about 4.5% among credit unions that did not sell. It also found that average dollars of credit union loans-per-member grew about 24% among sellers versus about 17% among non-sellers. Loans-per-member for sellers increased to about 30% if credit card loans on the outsourced credit card were included. Monique Allen, spokeswoman for Asset Exchange, stressed that the firm was not suggesting a direct connection but rather a correlation in the data. “We see a correlation between card portfolio sales and increased membership and loans, but there are undoubtedly a number of factors at play,” Allen said. “One of those factors could be a card portfolio sale, including an increase in marketing of the CU-branded card and the expanded card products a partner is able to provide.” But Sue Chrzan, spokeswoman for Card Services for Credit Unions, the association of credit unions which process their card transactions with Certegy, pointed out that the study really didn’t say anything useful without more data. “It’s impossible to tell just what these credit unions did or what might have had an impact on their growth,” she noted. But she also pointed out that the increase in loans-per-member that were shown from the outsourced credit card activity could have belonged to the credit union had they not sold the portfolio. -


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