Desert Schools First CU to Offer Amex Through MBNA

PHOENIX, Ariz. – Members of the $2.1 billion Desert School FCU will be the first credit union members in the country to be offered an American Express card from their credit union partnered with a card issuing bank. Delaware-based MBNA and Desert Schools will begin mailing offers for the cards to selected members soon, according to Jeff Meshey, executive vice president with Desert Schools. “We really saw this opportunity as a win-win for everybody involved,” said Meshey, “we don’t know how many of members will want the card, but we wanted to have the chance to offer it,” he added. Desert Schools sold its card portfolio to MBNA in 2001 and Meshey called MBNA one of the credit union’s principle business partners. Meshey explained that the credit union had been working with MBNA preparing for the roll out in the expectation that the courts would allow MBNA to issue American Express cards. The Supreme Court effectively made that decision when it declined to hear an appeal of a lower court ruling on October 4. Interestingly, Meshey said that Desert Schools had considered working with MBNA to offer its members Visa’s new Signature Card but the credit union concluded the Signature Card would not be as good an offering. The Signature card is Visa’s card product that is meant to counter American Express in the upper income market. Meshey said that the credit union used parameters to decide which members would be offered one of the new MBNA American Express cards but couldn’t comment on their specifics. Hal Erskine, senior executive vice president for credit unions at MBNA said that the card issuer plans to offer its American Express product to all of its credit union partners but acknowledged that every credit union partner might not be interested in the card. Erskine also acknowledged that MBNA faces skeptics who point out that the card brand has not had a traditionally robust relationship with financial institution issuers, a point that its competitors Visa and MasterCard point out often. “Only time will tell how the card performs, but we have had strong acceptance so far and anticipate a solid performance,” he said. Meshey said that Desert Schools saw the card as primarily a secondary card for most of its members and looked into the future to a time when it might even help draw new members. Unlike American Express’ own card, the current crop of MBNA-issued American Express cards carry no annual fee and Erskine said that, even if future MBNA American Express Cards carry an annual fee, it will be lower than the American Express’ fees. Card experts have taken a wait and see attitude toward American Express’ most recent card issuing venture with a U.S. financial institution. -