Service Group board on Nov. 10 paved the way for a restructuring of the trade group subsidiary. The 11-member panel, formerly part of the Credit Union National Association's board, voted to create a subsidiary called CUNA EFT Corp. to house the troubled Card Services division and separate it from CUNA Service Group's balance sheet. Although the EFT subsidiary's initial focus will be card-processing, it may be used for other electronic funds transfer operations, according to a memo from CUNA Service Group chairman John Gallagher. The memo also seemed to break from changes announced by outgoing CUNA president Ralph Swoboda in a Nov. 3 memo. It said the plastics operation would be getting a new chief executive, to whom Card Services senior vice president Keith Floen would report. But Mr. Gallagher's memo said that the board would hire a consultant for six to eight months only to raise capital for the new operation. "It should be noted here that the board has publicly expressed confidence in Keith Floen's ability to manage the card operation," Mr. Gallagher said. "The consultant will handle the external portion of bringing the plan together, while Keith will focus on the internal portion."
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