To Sell or Not to Sell Your Credit Card Portfolio, that is the Question….

CUNA CFO Council
July 17, 2008 | COMMENTS

This issue is specifically addressed in a new white paper titled "Credit Card Portfolio Seller, Survey Results" published by the CUNA CFO Council. Written by Frank Selker, President of Asset Exchange this paper summarizes the results of a survey of 300 credit unions that sold their credit card portfolios between 2002 and 2006.

Bob Warren, SVP and CFO of Virginia CU Inc., in Richmond, Virginia and Chair of the CFO Council Education Committee described the paper as a “must read for any CFO whose credit union is considering the sale of its card portfolio. This topic has been on the CFO Council list serve in recent weeks.”

The conclusions of the survey are mixed.

• Many were not satisfied with the service, pricing and products of the new portfolio owner.
• Portfolio growth has been lower among the sold portfolios than those that were retained by their credit unions.
• Revenue sharing results fell short for about 30% of the credit unions while exceeding expectations for 9%.
• Over half of the credit unions plan to explore other options when their current contracts come up for renewal.

Bob Warren, whose credit union has a large and profitable credit card portfolio, recommends that "credit unions consider allocating more resources to this product line.  A well managed credit card program can be a great source of value for your members and your credit union."

Council members are reminded that more than 170 white papers from all six CUNA Councils are available free of charge in the white paper section of the CUNA CFO Council website.