Group To Proceed In Credit Card Bank Without CUNA Mutual

MADISON, Wis. -- CUNA Mutual Group said Monday it is terminating its partnership in Union Financial Services, the would-be industrial loan company developing a credit card bank for credit unions. Corporate One FCU has also pulled out of the project, as credit union group participation proved an impediment to regulatory approval for the ILC charter, sources said. However, separate investors will go forward with an application with the FDIC for a Utah state chartered ILC that would buy and manage credit card portfolios for credit unions. The FDIC has enacted a six-month moratorium on all new ILC charters while it works to resolve a brewing controversy over requests by several non-financial entities, like Wal-Mart Stores, to enter the banking business through ILCs.