"We chose TMG Financial Services because of their commitment to cardholder service, as well as their credit union-oriented rates and fees," explained Bill Winter, CEO of St. Cloud. "They also have a competitive rewards program for every cardholder, which is something we could not do on our own. A final consideration was our history with The Members Group and how much we value what they bring to the table."

Jeff Russell, executive vice president with TMG, explained that, like other credit union-based card portfolio buyers, the firm made the most of its links to credit unions and credit union philosophies.

"I think there is a definite level of comfort with credit unions in choosing us over a bank offer," explained Russell. He added that TMG was still seeing competitive bids from bank-based purchasers but that it was hard to tell how many of those will prove to be successful. Russell explained that the three sales had been in the pipeline for about six months and closed at the end of the year.

Since these three purchases were TMG's first, the firm faced the challenges of converting the purchased card programs to the TMG platform and program. Russell explained that the task in the case of these three would not be too complicated, however, since two of the three already have a relationship with the CUSO. Nevertheless, since the portfolios are changing hands, notifications will still need to be sent to cardholders about the change.

Russell acknowledged that TMG shares a similar philosophy and approach to cards with other credit union-owned card purchasers but said the CUSO has added an additional way for CUs that sell their card portfolios to enter into agent programs.

Essentially, TMG encourages CUs that sell their portfolios to the CUSO to also invest in the CUSO. Doing so, Russell pointed out, allows the CU to participate in the growth of the card portfolio beyond how the sale was negotiated.

"What this means is that CUs can have an additional income stream from the card portfolio over and above the income stream they might have already negotiated," Russell said. "In addition, the CU will participate in the overall growth in all our cards as well."

Russell said that TMG believed that it was the only credit union-based card portfolio purchaser that offered this option, and he acknowledged that the CUSO offered the option of investing in its portfolio of cards to all credit unions. "It's definitely the preferred method for our agent credit unions," he said.

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