Navy FCU Card Loans Pass $2B at EOY 2005

The nation’s largest credit union bank credit card issuer posted an 19% annual gain in outstandings, topping $2 billion for the first time. VA-based Navy FCU reported 4Q/05 outstandings of $2.11 billion, ranking it as the 20th largest U.S. issuer according to CardData. Fourth quarter volume was $1.3 billion, compared to $1.1 billion for 4Q/04. For the full year, Navy FCU posted gross dollar volume of $4.64 billion, compared to $3.98 billion for 2004. The issuer’s account base increased 12%, to 1,104,547 accounts. However, active accounts increased only 8%, to 580,376 accounts. At the end of 2005, Navy FCU had 1,196,084 cardholders. The credit union issues “Classic,” “Gold,” and “Platinum” VISA and MasterCards, as well as the “nRewards” VISA and MasterCard, “TravelValue” VISA and a “Student” VISA card. In July, TSYS renewed its agreement to process Navy FCU’s credit card accounts for an additional five years. For complete details on Navy FCU’s fourth quarter performance, visit CardData ([www.carddata.com][1]). (CF Library 7/7/05)

NAVY FCU EOY OUTSTANDINGS
2001: $1,308,114,643
2002: $1,458,404,990
2003: $1,604,048,644
2004: $1,775,319,090
2005: $2,110,159,600
Source: CardData (www.carddata.com)

[1]: http://www.carddata.com

Details

SAGE & VERUS

The U.K.’s largest software company is acquiring a U.S. credit card
processor that focuses on small and medium-sized businesses.
London-based Sage Group has signed a deal to buy Nashville-based Verus
Financial Management for GBP 184 million in cash. Verus posted 2005
revenues of GBP 36 million compared to GBP 29 million in 2004. Operating
profit, before depreciation and amortization was approximately GBP 12
million compared to GBP 4 million in the prior year. At the end of 2005,
Verus had gross assets of approximately GBP 14 million. Verus was found
in April 2002 by Rich Roberts. Roberts was the previous founder and CEO
of PMT Services which was sold to NOVA for $1.3 billion in 1998. Verus
acquired Network 1 in July 2002. Sage says Verus will form the core of
its North American Merchant Services Division, complementing Sage’s
existing North American Payroll Services.

Details

CardOne Plus Deploys NFR Security System

CardOne Plus, which offers customized, branded debit card solutions for a global client base of merchant resellers, corporations, and users of eWallet solutions, has deployed NFR Security’s “Sentivist Intrusion Prevention System” for its real-time monitoring and alert capabilities against all network threats. NFR Security is a provider of real-time threat protection systems to secure business networks CardOne Plus provides customized, branded debit card solutions for a global client base of merchant resellers, corporations, and users of eWallet solutions.

Details

Smaller Portfolios Attract Solid Premiums

Smaller credit card portfolio sales produced an average premium of 15% last year, with the range beginning at 5% and ending at more than 20%. This compares to an overall average premium above portfolio asset value of 20.43% for 2005, the highest price level in more than ten years. According to card portfolio broker R.K. Hammer, smaller deals tend to have very conservative local credit quality standards with known customers, thus producing somewhat lower income yields but much better loan quality and FICO Scores. Hammer also says that average cardholder balances are usually lower than larger portfolios and thus create an asset/income growth opportunity after the purchase. Additionally, except in the instance of a partial portfolio sale, smaller sellers and buyers always want high quality ongoing agent programs, making the purchase price a buyer is willing to pay up to twice as much than for a liquidating file.

Details

AmeriDebt and DebtWorks Settle FTC Charges

The founder of a credit counseling and debt management enterprise has agreed to settle FTC deception charges for as much as $35 million. Andris Pukke, founder of AmeriDebt and DebtWorks, is also permanently barred from engaging in credit counseling, debt management, and credit education activities. In November 2003, the FTC charged that AmeriDebt and DebtWorks deceived consumers with claims that AmeriDebt was a nonprofit organization and that it provided counseling services to consumers seeking to get out of debt. The FTC charged that, rather than operating for charitable purposes as advertised, AmeriDebt funneled profits to affiliated for-profit entities and individuals, including DebtWorks and Pukke. The complaint also charged that the defendants did not provide counseling services, but simply enrolled every customer in a debt management plan. According to the FTC, AmeriDebt also kept its clients’ first payment under their DMPs as its own fee, rather than disbursing the money to consumers’ creditors as promised.

Details

CUs Offered a 2006 Card Marketing Guide

Dallas-based TNB Card Services has published a new marketing guide for credit unions that covers acquisition, activation, retention and loyalty programs. The TNB 2006 Card Marketing Guide offers a mix of solutions for acquisition, activation, retention, and loyalty programs. TNB works with its client credit unions to develop successful campaigns to drive card usage and increase revenue.

Details

Verus to be Acquired by UK Firm for $325MM

Nashville-based Verus Financial Management is being acquired by the UK’s Sage Group for $325 million in cash. Verus is a credit card processor that focuses on small and medium-sized businesses. Verus posted 2005 revenues of $64 million compared to $51 million in 2004. Operating profit, before depreciation and amortization was approximately $21 million compared to $7 million in the prior year. At the end of 2005, Verus had gross assets of approximately $25 million. Verus was found in April 2002 by Rich Roberts. Roberts was the previous founder and CEO of PMT Services which was sold to NOVA for $1.3 billion in 1998. Verus acquired Network 1 in July 2002. Sage says Verus will form the core of its North American Merchant Services Division, complementing Sage’s existing North American Payroll Services.

Details

Credit Card Delinquent Dollars Stay Under 4%

Credit card delinquencies, based on total dollars outstanding, dipped to its lowest level in more than ten years for a third quarter period. Sequentially, delinquent dollars rose a modest 14 basis points while the number of past-due credit card accounts edged down slightly by seven basis points from the record set in the second quarter. Based on total dollars outstanding, credit card delinquencies remained below 4.00% during 2005 for the first time since 2000. However, based on the number of past-due credit card accounts, delinquency has been hovering at record levels for all three quarters. According to the American Bankers Association’s “Consumer Credit Delinquency Bulletin,” delinquencies based on total dollars outstanding for 3Q/05 were 3.74%, compared to 4.60% in the second quarter and 4.36% for 3Q/04. Based on the number of accounts past-due, the figures were 4.74% for 3Q/05, 4.81% for 2Q/05, and 4.26% one-year ago. The ABA noted that the rise in the number of delinquent accounts is likely linked to rate increases by the Federal Reserve and high gas prices.

3Q CREDIT CARD DELINQUENCY HISTORY
(based on total dollars outstanding)
1980: 3.40%
1985: 3.15%
1990: 4.01%
1995: 4.21%
2000: 3.93%
2005: 3.74%
Source: ABA Delinquency Bulletin

Details

Multimedia Gift Card to Pilot in Q1

Tulsa-based EnXnet and One28 Marketing Group report that MoxyCard, a new multimedia gift card, will be piloted by a few large retailers during the first quarter. MoxyCard combines the functionality of a magnetic stripe gift card with the electronic capabilities of optical disc media, enabling merchants to place rich media advertisements containing special offers, printable coupons or full video presentations and web link connections.

Details

Bank Midwest and FDC Expand Relationship

Missouri-based Bank Midwest has inked a deal to form a new merchant services alliance with First Data that includes online sales capabilities and gift card programs. First Data will provide all merchant payment processing services on behalf of Bank Midwest and offer an expanded portfolio of electronic payment products and services such as online sales capabilities and gift card programs. First Data currently provides official check and money order services to Bank Midwest. Bank Midwest, a subsidiary of Dickinson Financial Corporation (DFC), has over $3 billion in assets and over 70 banking centers.

Details

BA Merchant Services Lands the USPS Contract

BofA’s BA Merchant Services has inked a contract with the U.S. Postal Service to provide credit card processing and settlement services for more than 34,000 sites, including post offices, automated postal centers and the online postal store at USPS.com. Services are expected to begin in March. BA Merchant Services processes nearly $350 billion in annual credit card volume, serving approximately 530,000 merchant relationships at over 850,000 locations.

Details