New Ownership Scheme Sought For CU CreditCard Bank
SALT LAKE CITY - (04/17/06) The four partners in a plannedcredit card bank for credit unions were preparing last week toamend their ownership shares in the fledgling project in order tosatisfy regulatory concerns. But representatives of Union FinancialServices said they continue to forge ahead with plans for anIndustrial Loan Company that will serve as a credit card bank forcredit unions, even while the bankers have begun lobbying againstthe project. Banking lobbyists said last week during hearings onthe controversial application by Wal-Mart stores for an ILC charterthey will oppose the Union Financial Services bid, as well as aseparate credit union proposal by Wescom CU to operate its owncredit card bank via a California-chartered ILC. Union Financial, ajoint project of CUNA Mutual Group, Certegy, Corporate One FCU andCard Services for CUs, was notified by the FDIC in December itwould not approve the application because CSCU, a CUSO, would becontrolling owner in the bank. Plans for the credit card bank havebeen pushed back at least six months because of the ownershipissue.