Why Not A Credit Union Card Brand?

WASHINGTON – Credit union executives and directors, frustrated over their liability for cards breaches for their bank-owned Visa and MasterCard systems, floated the idea yesterday of a credit union-owned credit card brand. “Eighty-nine million members. Is it time to put our own card out there? Discover did it a number of years ago,” said an agitated Jim Blake, CEO of HarborOne CU, whose Brockton, Mass., credit union had to reissue cards 12 times in 2004, 35 times in 2005 and 44 different times in 2006. He expects to reissue more than 100,000 cards because of the latest breach at TJ Maxx. Blake, during a session at CUNA Governmental Affairs Committee, said he believes the ongoing crisis in data security could be largely solved if the two cards companies enforced their own security standards, particularly the ban on the retention of customer data. “There’s got to be a break in there for us if we can compete on our own, with our own card,” said the head of the $1.4 billion credit union. A credit union card brand, like the credit union ATM brand, would be managed by credit unions, with transaction and interchange fees circulated back within the credit union movement, not taken out of the system by the big banks. Jim Fossos, secretary of the board at Seattle Metropolitan CU, liked the idea and suggested credit unions could benefit by providing a credit union owned alternative to the Visa and MasterCard, both controlled by large banks. “We ought to start looking at our own credit card,” said Fossos.