What service might a small, Portland, Ore.-based company offer that would interest some of the top 20 credit card issuers? Secured credit cards is the specialty that Renaissance Bankcard Services has latched onto, and chief executive Irving J. Levin says it has drawn some interest. In recent years, Mr. Levin has been honing his expertise in the secured- card business through two organizations: Orchard Bank, a community thrift in Portland of which he is chairman, and Renaissance, a secured-card marketing and servicing company of which he is CEO. Through a recently launched agent program, Orchard and Renaissance offer to do everything involved in running secured-card programs for other banks. Through July, the program had signed up five customers. Renaissance mainly goes after small banks, which historically are the ones most interested in secured cards. But Mr. Levin also is angling for bigger fish as some leading credit card banks have been entering this part of the business and adding prestige to what was once an industry backwater. Secured cards, usually for people trying to establish or reestablish credit histories, require the cardholder to open a deposit account as collateral. Once such customers prove their repayment reliability, they may be converted to standard, unsecured credit lines. Mr. Levin declined to name banks with which he is negotiating, but he said Renaissance expects to sign agreements with a number of the top 20 credit card issuers to handle the special servicing requirements of secured cards. A source close to the market, who works with some of these issuers, confirmed that Mr. Levin is discussing business opportunities with large players. The source, who did not want to be identified, said, You will see Renaissance grow very quickly over the next 18 months. Mr. Levin concedes that the relationships may be less than permanent, like many secured-card accounts. We anticipate that they will work with us for a few years, he said. We would be stepping stones for them. Mr. Levin said larger institutions tend to be interested in doing their own servicing and, once they understand the nuances of secured-card processing, would likely take back whatever they initially outsourced. Undaunted by the temporary nature of such alliances, Mr. Levin defines success by how flexible Orchard and Renaissance are able to be. Our willingness to experiment sets us apart, he said. Mr. Levin's career itself evolved in an unpredictable way. The 44-year-old Indiana native started down a very different career path when, in 1971, he won a scholarship to play cello at the Chicago Musical College. But after a year he was struck by wanderlust. He left school to play in the national orchestra of Mexico for two years, performing for ballets. He earned a bachelor's degree in American history and business in 1976 and an MBA in 1977 from the University of Chicago. Mr. Levin envisioned himself as leading and playing in an orchestra after completing his education. Instead, he joined Visa in 1979, working on new product development, fraud detection systems, and evaluating credit risks in foreign markets. In 1983 he joined Arthur D. Little Inc. as a consultant but left after four years to help start ITT Corp.'s credit card business, which became First Consumers National Bank. In 1990, the catalogue company Spiegel Inc. bought First Consumers, and Mr. Levin left a year later to found Renaissance. In 1992, Renaissance formed TL Holding to buy a majority of Orchard Bank stock. Mr. Levin credits his father, who ran a women's clothing business, with instilling his entrepreneurial spirit, which led him into the largely uncharted waters of secured-card servicing. Renaissance has only about five direct competitors, Mr. Levin says, in part because secured cards have only recently taken on an air of legitimacy. As this market segment becomes increasingly popular, Mr. Levin expects to see a sharp increase in the number of secured-card specialists. If First Consumers National Bank is a gauge of how card issuers perceive the field, Mr. Levin may very well be right. Patti McCoy, director of marketing for First Consumers, which is one of the largest players in the market, said: We haven't done an agent bank program, but we would absolutely consider doing something like that. Meanwhile, it appears the unique alliance between Orchard Bank and Renaissance is not duplicated anywhere. Renaissance finds marketing partners for Orchard. That makes us unusual as a team, said Mr. Levin. The partners range from affinity relationships with nonprofit organizations for example, a secured credit card offered through Operation Hope Inc., a Los Angeles organization that finds lending partners for underserved communities to a secured card for Montgomery Ward department store customers who are rejected for its proprietary unsecured credit card. In total, Renaissance serves 150,000 secured-card accounts. About 110,000 of the accounts, with $60 million of outstanding balances, belong to Orchard Bank. About a year ago, Citizens National Bank of Houston became the first bank in the agent program. Mr. Levin considers Citizens a prototype for the program that officially took off this year. Not all banks in the program are small. Recently, Travelers Bank of Wilmington, Del., a national issuer with 650,000 unsecured credit card accounts, signed up to offer an alternative to people who are rejected for its conventional card. Secured cards are not a core business for us, said Tom Kerwin, executive vice president of marketing at the Travelers Corp. unit. We believe that managing a secured-card portfolio requires specific skills that Irving has built in his organization. Others are impressed by the clean image of Renaissance-Orchard in a business that not too long ago was known more for sleaze. We didn't see any abuses when we looked at Renaissance, said Richard Gray, president of SAF Financial Services, a subsidiary of America's Community Bankers, the thrift trade group. In fact, we see an (operation) that is quite clean. SAF Financial Services is considering offering the partnership's services to member thrifts and banks. The success of Renaissance and Orchard hinges, in part, on the market's appetite for secured credit cards. According to MasterCard's research, of 26 million consumers who do not have credit, 17 million to 20 million are prime prospects for secured cards. While Mr. Levin believes the market has grown dramatically, he thinks MasterCard's estimates are inflated. He sees the number of potential customers in any given year at five million to 10 million. Brian J. Schwartz, MasterCard's director of new market development, sticks up for his company's estimate and says he can understand that those mired in promoting secured cards believe the pool is smaller. Secured cards are not easy to sell, he said, referring to the difficulty of getting consumers to write a check to secure the line of credit. But the good news is enough for Mr. Levin and others to build business cases around. Today there are some issuers with 500,000 secured card accounts, he said. A few years ago there weren't even that many secured cards out there.

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