DALLAS — TNB Card Services, the card issuing and processing arm of credit union owned Town North Bank, may have signaled a more aggressive stance toward CU card portfolio purchases with the purchase of a $16 million card portfolio from the $490 million A+ Federal Credit Union, headquartered in Austin, Texas.
The card brokerage firm Brookwood Capital, headquartered in Peterborough, N.H., facilitated the sale.
As a result of the partnership, A+ will also offer a Platinum card and a Rewards Program for the first time and initiate a family account card program, which will benefit the many students attending the participating schools in the A+ service area. Finally, TNB will also work with A+ to expand its business card program, enabling it to offer improved products to this growing market segment.
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"It took us four years and a lot of soul searching before we found the right solution to expand our card portfolio and provide our members a better product," said Kerry Parker, CEO of A+ Federal Credit Union. "We received proposals from national issuers, but didn't feel secure or comfortable doing business with any of them. We knew that we had to maintain some control of the program in order to ensure our members were protected. Credit union-owned TNB enables us to do just that and more."
"We are very pleased to partner with a high caliber credit union such as A+ FCU," said Jay Kurian, first senior vice president of TNB. "Kerry Parker is recognized in the credit union movement as a well-respected CEO, and we are honored that she chose TNB's issuing program."
Stan Cowan, vice president for development for A+ said he had not been at the credit union for the full four years, but that he had the impression that the credit union simply never felt comfortable with previous bids from other issuers. He also said he believed that TNB had not bid previously for the portfolio.
"To tell the truth I had never heard of TNB before the bid came across," Cowan said, "a bid by a bank owned by credit unions."
In the past, TNB has focused on purchasing smaller credit union card portfolios and has not bought many as large as this one. TNB executives have said that portfolio size does not matter as much as credit union willingness to continue to participate in the card program in clinching the sale.
Cowan explained that A+ had seen growth in its card balances, but was not able to expand the card program to new or potential members as well as it would have liked. Part of the problem was the inability to offer platinum or rewards card programs, something that it will now do with TNB. With a little over 76,000 members, A+ card penetration stood at below 12%. –[email protected]
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