Elan Financial Services may have purchased CU credit card portfolios from TNB Card Services, but it may have a ways to go to win over those credit unions.
Ray Ponteri, CEO of the $253 million El Paso Employees Federal Credit Union in El Paso Texas says he has already told Elan that the credit union would not sign an addendum to its original agent issuing agreement with TNB Card Services for an agent issuing agreement with the US Bancorp subsidiary.
"I have read the [original] agreement and nothing in there says anything about it being assignable," Ponteri said, stressing that he did not have anything against Elan but that the terms outlined in the addendum were not a good deal for El Paso's members.
Among the difficulties with the addendum, Ponteri explained, were changes to the revenue sharing agreement the credit union originally made with TNB in 2002 and having to switch El Paso Employee's members from MasterCard branded cards to Visa branded cards. The CU had already switched member cards from Visa to MasterCard after the 2002 sale.
It's unclear how many credit unions who currently issue cards through an agent-agreement with TNB might share El Paso Employee's reservations, but one long term card broker has reported that, in general, sales of card portfolios and agent issuing arrangements are made in separate agreements and that CUs may not be obligated to sign another just because the card portfolio has been sold.
Elan has not yet reported how many of the roughly 160 card portfolios have also been sent an addendum to their agent agreements.
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