DALLAS -
With credit unions preferring to sell their credit card portfolios to credit union-owned companies, TNB and its TNB Card Services subsidiary has emerged as one of the leading purchasers of credit union card portfolios.
Not A Response To Wescom's Effort
Scott Wagner, executive vice president at Card Services, insisted the new funding was not prompted by the advent of a new credit union-owned entity, California credit union giant Wescom CU, into the market. "In general, it will go towards growing our two main lines of business, agent issuing services and our commercial real estate business," said Wagner. "The additional capital will is earmarked to help us continue to execute our business model."
The card issuance is conducted solely for credit unions and now manages 109 credit union cards portfolios through the Card Services division. The commercial real estate development is conducted through the bank, he explained.
TNB was acquired by 51 state-chartered credit unions in Texas in 1975 to ensure that credit unions had ready access to the Federal Reserve, MasterCard and Visa payments systems. It began processing credit union card accounts in 1976, then agent issuing in 2001, before starting to acquire and manage portfolios for individual credit unions in 2002.
Since then, the market for credit card portfolios has come to be dominated by big banks, especially MBNA, now a subsidiary of Bank of America; Elan Financial Services, a unit of US Bancorp; and InfiCorp., part of First National (Bank) of Omaha. Credit unions, especially smaller ones, have sought a credit union-owned purchasers as a way of holding the assets within the credit union movement. Wescom CU recently changed charters to enable it to buy credit union cards portfolios in recognition of this.
Recent Offering Oversubscribed
Wagner said the recent stock offering, which occurred in December, was oversubscribed, at $95 million. The additional shares were all sold to the 36 state-chartered Texas credit unions that still hold shares in CU Bank Shares.
TNB Card Services currently provides card processing services for more than 450 credit unions in 36 states. The company also provides a call center, fraud prevention services and portfolio consulting.
