According to Corona, Elan will continue to offer nonrewards products for the consumer and business sector, but the majority of members are choosing the rewards-based cards.

"Eighty-three percent of the new cards being issued are rewards cards. It's very clear that members expect a strong rewards proposition. We are constantly accessing feedback from our partners and their members and developing products and services to meet their needs," she said.

The card issuer did not report how many of its credit union partners have indicated an interest in issuing the high-end card.

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Ariz. Gov. Opposes Payday Referendum

PHOENIX — First it was the state attorney general and last week it was Arizona Gov. Janet Napolitano who joined the credit union lobby and consumer groups in urging defeat of Proposition 200.

"In today's economy, the last thing we need is to force working families further into debt. Please join me in voting no on Proposition 200," declared Napolitano, a Democrat. Prop 200 is a Nov. 4 referendum that would enable payday lending shops to expand in 2010 and charge predatory rates.

The Arizona Credit Union System, the North Carolina-based Center for Responsible Lending and Attorney General Terry Goddard have been enlisting CU members and employees to push for defeat of Prop 200, which they described as "deceitful legislation."

Goddard and the league leadership have complained that the payday lobby has lied to the public in its $12 million TV campaign promoting Prop 200 as a "reform" measure to "clean up the payday industry."

Goddard and Scott Earl, the president/CEO of the league, contend that Prop 200 is simply "an industry-written measure with no real reform and the unfortunate impact of canceling a 2000 sunset law that allows payday firms" to charge the predatory rates above a 36% limit.

League officials said a reading last week showed Prop 200 was rated a tossup as to adoption by Arizona voters.

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Florida CU Sees Jump in Card Balances

PENSACOLA, Fla. — In the face of what is arguably the worst economy the country has seen in decades, the $929 million Pen Air Federal Credit Union has managed to significantly increase its credit card balances.

According to NCUA records, Pen Air had an overall credit card portfolio that was flat or slowly declining in 2007, with just over 12,800 accounts and balances just over $24 million. But by the end of August 2008, the credit union had lifted the number of cards to more than 15,100 accounts and over $30 million in balances.

This is particularly significant given the economic depression that is currently afflicting Florida, which has a dampening effect on many parts of the state's economy and have brought about losses to both banks and credit unions.

"We are pleased with the professionalism and performance offered by PSCU Financial Services as well as their proactive security and fraud management practices. We also appreciate the opportunity to work with a credit union-owned processor that is dedicated to serving the needs of our credit union and the entire credit union industry," said Ron Fields, the credit union's new interim CEO in a statement about the balance increase that PSCU prepared.

No one from Pen Air was available to discuss the card balance success as of press time due to the untimely death of its CEO John Davis (see story page 12).

With the help of consultants from PSCU, Pen Air analyzed its portfolio and launched a series of campaigns to boost card activation rates, usage and acquire new accounts.

The promotional campaigns began with a credit line increase and balance transfer/transaction level processing promotion. This earned a 5.11% response rate and added $2 million in balances, the CU reported. The next promotion targeted inactive cardholders and earned an impressive 30% response. This was followed by several additional promotions for new accounts, activation and a targeted balance transfer.

"After we met with the cooperative's team and reviewed the data, we realized that we weren't doing anything to encourage growth in the portfolio and the program's attrition was the natural result of that lack of stimulus," said Fields.

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