Eleven CUs Sold Card Portfolios in Second Quarter

PORTLAND, Ore. – Eleven credit unions sold their credit card portfolios in the second quarter of 2004, according to an analysis of NCUA data preformed by Asset Exchange and market watching performed by Brookwood Capital. Asset Exchange is the largest broker of credit union card portfolios in the country, headquartered in Portland, Oregon. Brookwood Capital is the youngest and smallest of the credit union card portfolio brokers and is based in Peterborough, New Hampshire. Asset Exchange’s analysis found that card penetration among credit union members has lagged new member growth, declining from 19.1% in March 2004 to 17.9% as of the end of June 2004. Credit union credit card portfolios still represent about 4% of credit union assets in June 2004, which is about what they represented at this time in 2003. About the same number of credit union card portfolios rose as shrank for the 12 months ending in March 2004, the broker said. Brookwood’s observation has been that 30 credit unions have sold their portfolios this year, which is about on the same pace as last year, but the average portfolio sold size has increased from $7 million last year to $8 million this year. Overall, these trends continue to indicate that many credit unions are continuing to take a strategic look at their credit card product lines, Brookwood said. “While these portfolios are nearly always profitable, many smaller issuers are trying to find a way to issue a stronger product set while lowering their institutional risk profile and increasing the bottom line. In some cases partnerships can provide such an outcome, but determining if this is so in each individual case requires a thorough and careful analysis,” the company added. -