CU-Owned Credit Card Bank Evolving
The four partners in a planned credit card bank for credit unions were preparing last week to amend their ownership shares in the fledgling project in order to satisfy regulatory concerns. But representatives of Union Financial Services said they continue to forge ahead with plans for an Industrial Loan Company charter that will serve as a credit card bank for credit unions, even while the bankers have begun lobbying against the project.
Banking lobbyists said last week during hearings on the controversial application by Wal-Mart stores for an ILC charter that they will oppose the Union Financial Services bid, as well as a separate credit union proposal by Wescom CU to operate its own credit card bank via a California-chartered ILC.
Union Financial, a joint project of CUNA Mutual Group, Certegy, Corporate One FCU and Card Services for CUs, was notified by the FDIC in December it would not approve the application because CSCU, a CUSO, would be controlling owner in the bank. Plans for the credit card bank have been pushed back at least six months because of the ownership issue.