SALT LAKE CITY — Union Financial Services, the organization, which tried to get a start as a credit union-owned industrial loan corporation formed to purchase credit union credit card portfolios, has instead applied to become a bank with ties to the credit union industry that will purchase credit union card portfolios.

The organization has filed an application with the FDIC to become a state chartered bank that will be able to purchase credit union card portfolios. Once the application is approved, the bank, which will be capitalized to $30 million according to Wally Jensen, the organization's CEO, it will follow the same business plan it would have followed had it been allowed to become an ILC.

The ILC effort floundered on two regulatory problems, which were distinct but related, according to sources close to both the Union Financial effort and a similar attempt led by the $3.5 billion Wescom Credit Union. First, before the FDIC would approve the application to charter and insure the ILC, the banking regulator asked that NCUA sign off on what the credit unions were trying to do and the NCUA was reluctant to do that. Second, the whole topic of the industrial loan charter became steadily hotter as major retail firms, such as Wal-Mart, began to seek ILC charters and this slowed the credit union effort even further.