PORTLAND, Ore., August 10, 2004 – A recent study based on information filed with the National Credit Union Association (NCUA) has found that credit unions that sold their credit card portfolios in 2001 or 2002 reported higher growth in both membership and loans-per-member than credit unions that did not sell their portfolios.

The goal of the study was to understand how selling a card portfolio affects a credit union’s growth and member relationships. After a card portfolio sale, the portfolio buyer usually issues the card with the credit union brand, and often increases card usage by lowering rates, adding features, and increasing marketing. Does this increased marketing and growth in a credit union branded product benefit the selling credit union overall?

The study, conducted by AssetExchange using public-domain NCUA data, analyzed approximately 2,400 credit unions that held credit card portfolios of over $1 million in 2000. Comparing credit unions that sold their card portfolios in 2001 or 2002 to those that did not, the study revealed that:

• Average credit union membership grew about 8% from December 2000 to December 2003 among credit unions that sold their card portfolios, versus about 4.5% among credit unions that did not sell.
• Average dollars of credit union loans-per-member grew about 24% among sellers versus about 17% among non-sellers. Loans-per-member for sellers increased to about 30% if credit card loans on the outsourced credit card were included.

“It appears that, on average, credit unions that sold credit card portfolios demonstrated stronger member relationships,” said Frank Selker, AssetExchange President. “A number of factors could be at play, but one factor may be that the success of portfolio buyers in marketing and growing the credit union branded card portfolio contributed to stronger member relationships.”