U.S. Bancorp to Purchase AAA Visa Accounts in East
Expanding retail operations outside its western base, U.S. Bancorp has agreed to buy a $75 million portfolio of American Automobile Association Visa card accounts from Rockland Trust Co., Rockland, Mass.
As part of the transaction, U.S. Bancorp, based in Portland, Ore., will incorporate four New England AAA affiliates into its membership banking program and offer checking and savings products to the participants. The program, which aims at members of organizations, operates through a recently formed subsidiary, U.S. Bank National Association.
The program operates separately from U.S. Bancorp's branches in Oregon, Washington, and California. Transactions are carried out by mail, telephone, fax, or automated teller machine.
Membership banking is an extension of the affinity-group marketing concept developed for credit cards and pioneered in the late 1970s and early 1980s by groups including the American Automobile Association.
U.S. Bancorp already has agreements with with 10 AAA clubs in nine Western states. The Rockland portfolio expands its membership banking program outside the West for the first time.
Membership Accounts Double
In the Rockland deal, U.S. Bancorp will add about 100,000 credit card accounts, doubling the accounts managed by the membership banking unit.
"This is an opportunity to test and exploit branchless banking on a national level," said Richard W. Eichhorn, president of the company's emerging-businesses group.
The company is talking with other organizations, including several AAA affiliates, about offering banking services to members through the U.S. Bancorp program, Mr. Eichhorn said.