TMG Financial Services’ acquisition this month of the $16 million credit card portfolio of Warren, Mich.-based Extra Credit Union provides further evidence that a slow resurgence in card-portfolio sales is under way, one observer suggests.
Des Moines-based TMG Financial Services, which owns 60,000 credit card accounts gained through various portfolio acquisitions, announced the deal Sept. 22.
The transaction is the nation’s second-largest credit union bankcard portfolio sale so far this year, Timothy Kolk, president of Peterboro, N.H.-based TRK Advisors, a portfolio sales-advisory firm, tells PaymentsSource.
“That’s a good-sized portfolio, and it indicates that while some have said the market for credit union card portfolios is dead, there is definitely activity out there,” Kolk says.
During the first half of this year, five credit unions sold their portfolios, marking the most credit union bankcard portfolio sales since 2009, TRK Advisors reported earlier this month (
Credit union bankcard portfolio sales peaked between 2004 and 2007, when the economy was surging and the pace of deals averaged about 60 per year, Kolk says.
Credit unions typically sell portfolios to third parties who manage them on an agent basis.
The $201 million-asset Extra Credit Union serves the faculty and families of schools located in southeast Michigan.
TMG Financial Services, a sister company of The Members Group, which provides credit card processing services, sees the acquisition as a good fit that enables the credit union to focus on its “core competencies,” Jeff Russell, TMG Financial Services president and CEO, said in a press release.
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