is a leading digital financial services company focused on "Doing it Right" for its consumer, commercial, and corporate customers. I am extremely enthusiastic about this acquisition and what it represents for our customers, clients, employees, and the communities in which we operate."ĭon Berman will continue to oversee the CardWorks business lines as part of Ally and will join Ally's Board of Directors and executive management team following closing.Īlly Financial Inc. "Ally is complementary to all of our existing consumer finance business lines, including our credit card and recreational lending businesses, as well as our merchant acquiring, third-party loan servicing, and recovery businesses. "The combination of CardWorks and Ally presents a tremendous opportunity for innovation, while we maintain a strong focus on our mission – which is to delight our clients and customers" said CardWorks Founder, Chairman and Chief Executive Officer Don Berman. Under the terms of the agreement, Merrick Bank, a wholly owned subsidiary of CardWorks, Inc., will merge into Ally Bank.
merchant acquirer, the roadmap includes expanding Ally's product offerings in the non-prime segment, as well as enhancing their direct bank deposit and consumer product platform, and third-party servicing and recovery capabilities. As a leading non-prime credit card and consumer finance provider with servicing capabilities across the credit spectrum, a top-20 U.S. This combination will provide customers with a comprehensive suite of compelling secured and unsecured banking products.ĬardWorks is a privately held company headquartered in Woodbury, NY with facilities in Florida, Pennsylvania and Utah. The closing will bring together two customer-obsessed companies that are focused on "Doing it Right", with a shared common vision and aligned cultural values. (NYSE: ALLY) in a transaction valued in excess of $2.65 billion, subject to final closing equity and other adjustments. In turn, such problems could have a chilling effect on the securitization market, he said.Cardholder Management Services, Inc., a leading non-prime credit card and consumer finance lender with a full-spectrum unsecured servicing platform and robust merchant services capabilities, announced today that it has signed a definitive agreement to be acquired by Ally Financial Inc. "I think there will be additional trusts that don't perform and will require similar actions." Berman predicted that there will be additional fallout from subprime card lending. With the loans closed to new purchases, bondholders will receive cash from the securities only as customers pay off their balances. The loans MBIA has assigned to CardWorks - which owns the subprime card issuer Merrick Bank Corp., and the consulting and management firm Cardholder Management Services - are packaged in securities, with bondholders carrying the risk of losses. Under the 10-year deals, the Dallas-based portfolio management company will set up card programs in the names of each of Spiegel's three store brands. On May 6, Spiegel announced that it would collect what it could from its bad loan portfolio, and, separately, build a new private-label business through deals with Alliance Data Systems Corp. The retail stores remain open for business. Problems with its card business threatened to bring the parent company's operations to a halt, and it has shut down the credit arm while it reorganizes under bankruptcy protection. The Spiegel portfolio consists of loans made to customers of the Spiegel, Eddie Bauer, and Newport News store chains, all of which were owned by the Downers Grove, Ill.-based subsidiary of Spiegel Group. Berman said, especially if the loans are made to people with weak credit histories, who are typical customers for store cards. The history of these troubled portfolios may make bondholders, who stand to lose from unpaid balances, more leery of buying card-backed securities in the future, Mr. of San Francisco after bank regulators shut it down last year.
He said he could only think of one other instance where that happened - Merrick Bank Corp., a South Jordan, Utah, unit of CardWorks, bought approximately $200 million of cancelled loans from NextCard Inc. Berman said it is nothing new for his company to collect on closed accounts, he called it unusual to be called in as a successor servicer on a portfolio, and to take over for a shuttered bank.
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