DALLAS - TNB Card Services has seen a slowdown in credit unions selling credit card portfolios and expects that trend to continue as CUs seek to offset poor performing auto and mortgage loan portfolios, the card processor says.
According to Mark Fenner, SRVP for TNB here, the company has seen a “significant” shift toward credit unions keeping credit card portfolios in the last five months and letting TNB handle the processing. It expects to see the trend continue in the latter half of 2008.
“Credit unions continue to focus on growth,” Fenner said. “But because of the economy, auto loans and mortgage loans, as we know, are not delivering the yields they were a few years ago. The credit card portfolio continues to be one of the highest-yielding investments on balance sheets. So there is a renewed interest in investing in it.”
TNB recently began offering CUs a service to leverage TNB’s expertise and knowledge of managing a credit card base, allaying fears about addressing risk and pricing on their own, Fenner said.
“Over the last five years we’ve built a portfolio that’s valued around $300 million in outstandings,” Fenner said. “So we have developed a lot of expertise in terms of how to manage and price, and address risk.
“By leveraging our expertise, our platform, and other things we bring to the table, our customers feel they can compete with the national issuers and have a very profitable, high-yielding asset without a lot of complexity behind it...We’ve had a great response to this over the last five to nine months.”
Fenner would not disclose a price for the service citing “too many variables,” as well as the fact the service is a single component of its “overall processing solution.”
For more info: www.tnbcard.com.
