Wescom CU Moves Forward With Card Processing Deal

PASADENA, Calif. – Three months after abandoning its bid for an industrial loan charter, Wescom CU is preparing to roll out a new plan to buy credit union credit card portfolios on its own. The $3.5 billion credit union has received approval from the California Department of Financial Institutions to change its charter to a central credit union, which will allow it to buy other credit unions’ cards. Under the deal, PSCU Financial Services, which processes transactions for 525 credit unions, will provide the operational support. “This is the pure credit union answer, when you have a credit union being able to buy the portfolios,” said David Serlo, president of PSCU. The two had planned to collaborate on an industrial loan company which would have bought and managed credit union portfolios, but the brewing controversy over an ILC request by Wal-Mart Stores, forced them to abandon that plan. The project is one of two racing to become the next credit card bank for credit unions. Organizers of Union Financial Services are also believed to be working to bring a two-year project to the market that will compete in the market.