Wescom Scraps Plans For Credit CardBank

PASEDANA, Calif. - (07/28/06) -- Wescom CU announced Thursday nightit has terminated its agreement to acquire an Industrial LoanCompany charter to launch a credit card bank for credit unions. The$3.5 billion credit union said both it and Silvergate Capital Corp.of San Diego mutually agreed to terminate the agreement for Wescomto acquire the bank's California ILC charter. Darren Williams,president of the credit union, reiterated his commitment to findinga credit union alternative to the current situation where bankingcompanies are buying up credit unions' card portfolios. The Wescomproject was one of two pending credit union initiatives to create acredit union-owned credit card bank to acquire card portfolios. Theother is owned by a group that includes CUNA Mutual, Corporate OneFCU, and other entities. Williams said the regulatory approvalprocess, in which ILCs being acquired by Wal-Mart Stores, HomeDepot, and other commercial entities have created controversy inCongress and the industry, is taking longer than anticipated. As aresult, Wescom will withdraw its application to acquire the ILCcharter form Silvergate Capital. The market for credit union cardsis currently cominated by US Bancorp (Elan Financial Services),First National of Nebraska (InfiCorp) and Bank of America (MBNA),with credit union-owned TNB Card Services also in the