THOUSAND OAKS, Calif. – Credit unions' return-on-assets on their card portfolios trails that of banks and monolines, and that's just fine with most credit unions. With a plethora of credit union card portfolio sales during the last two years, there's been a lot of talk about the viability of a CU's card portfolio as a money maker for the CU. Actually, says Robert Hammer, card portfolio expert and president of card advisory firm R.K. Hammer, most CUs don't care if their portfolio is a money maker or not. "Credit unions have a predictable history here of being in the 1.0% level. That's because credit unions think about cards as a member accommodation instead of a full-blown profit center. They don't care if they earn 5% or 1%, they want to provide the service to their members," said Hammer. According to a composite study by Hammer's firm, credit unions' card ROA of 1.10% as of mid-year this year trails banks' 3.83% ROA and the mammoth monolines' 4.28%. Hammer said the study is based on data from about 500 financials. Why are CUs lagging? "It's a philosophical difference. Monolines might have a 19% rate and $35 late fees, while credit unions are charging 8 or 9% and $5 for a late fee," said Hammer. So in other words credit unions could up their ROA if they truly wanted to, but Hammer says that's not in most CUs' nature. The ROA is based on rates, fees, and marketing dollars. "You can certainly charge more and earn more at a credit union, but they don't. They desire to have what we call member accommodation, but not at maximizing profit," said Hammer, who noted that he has CU, bank, and monoline clients and philosophy is what separates each of them. Hammer said monolines and banks spend more on marketing their cards than CUs, and also have much higher charge-offs than CUs. "I have never seen a credit union with bad credit quality. It's always in the 1 to 2% range. Compare that to a monoline that might charge off around 7%," said Hammer. Monolines can afford to do that because of the sheer volume of cards they have out there. Credit unions, with a much smaller base, can't, said Hammer. [email protected]