ACB Gets Help for a Move into Rival's Turf

By Kuykendall, Lavonne | American Banker, April 3, 2002 | Go to article overview

ACB Gets Help for a Move into Rival's Turf


Kuykendall, Lavonne, American Banker


America's Community Bankers says its partnership with InfiCorp Holdings Inc. will help it get a share of the community bank credit card business, which has historically been dominated by the Independent Community Bankers of America.

InfiCorp, an Atlanta firm that manages credit card portfolios on behalf of financial institutions that do not want to do it themselves, still offers agent bank deals on its own to banks that want to issue credit cards without necessarily managing or owning the receivables. America's Community Bankers says that its deal with the firm has numerous advantages over traditional agent bank programs.

These, it says, include approval rights over the use of the financial institution's name and logo; recognition of an applicant's relationship with the bank in credit underwriting; customer service linked to the bank's Web site, and branch employees' ability to call up customer card account data online.

Anita Gentle Newcomb, the president and chief executive officer of the trade group's ACB Partners for-profit subsidiary, said the program, announced March 11, was created in response to member request.

"Many community banks are finding it difficult to find a relationship with a credit card provider out there," Ms. Newcomb said. Smaller banks cannot afford the capital costs and infrastructure buildup that card issuing requires, but they want to be able to give cards to their customers because of the loyalty, branding, and profit opportunities.

The first of America's Community Bankers' 1,200 members to sign up for the program is Fidelity Homestead Association of New Orleans. With assets of $670 million and 50,000 customers, the bank might not be considered a prime candidate for credit card issuing, but it sees value in the service.

"Fidelity has really targeted growing our bank through checking accounts," said Boyd Boudreaux, a senior vice president at Fidelity Homestead. "To retain those customers, we want to offer debit and credit cards."

Mr. Boudreaux said Fidelity has not found the going easy. For a time in the 1990s, it offered cards through an agent bank contract with another local bank. Fidelity did not own the receivables or even a list of its credit card customers. Then the issuing bank was purchased by Bank One Corp.'s First USA subsidiary in Wilmington, Del., putting control of the portfolio in distant hands.

"We had a lot of problems with the transfer," Mr. Boudreaux said. "Since then we have not actively marketed the program. We pulled applications from our lobby."

When Fidelity's contract with First USA expired in February, Mr. Boudreaux was willing to give an agent bank relationship another try. This time he was certain what to look for. …

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