FDIC-selected Successor Servicer: Private-label retail credit card portfolio

  • Client type

    Bankrupt retail holding company with a private-label credit program

  • Portfolio size

    $1.2 billion in receivables across 700,000 closed credit card accounts, plus another $1.9 billion in charged-off receivables

  • The challenge

    FDIC-mandated shutdown of the issuing bank, leaving an inactive, structurally complex portfolio requiring specialized servicing

Overview

The issuing bank behind a national private-label retail credit card program was forced by the FDIC to shut down, leaving behind a large, inactive private-label credit portfolio. The portfolio faced numerous problems associated with the retailer’s bankruptcy, stalled operations, and diminished staff, and required specialized servicing expertise. However, that didn’t interfere with our ability to seamlessly transfer the accounts.

The challenge

  • No ability to drive engagement through ongoing credit access
  • Complex securitized structure with bondholder exposure
  • High-risk customer base with declining repayment rates

Our solution

With an inactive, structurally complex portfolio on our hands, we took on several distinct roles.

  1. 01

    FDIC appointment as Successor Servicer

    Appointed by the FDIC as Successor Servicer for the shut-down bank's portfolio.

  2. 02

    Specialized collections strategy

    Implemented advanced collections strategies tailored to inactive accounts across high delinquencies.

  3. 03

    Trustee & guarantor servicing management

    Managed servicing on behalf of trustees and guarantors; optimized recovery performance despite structural limitations.

  4. 04

    Master Note Trust Servicer appointment

    When a Master Note Trust had a payout event, we cleared a due diligence review and were appointed Backup Servicer, then Successor Servicer and de facto administrator of the Master Note Trust by the Trust's insurer.

  5. 05

    Systems migration

    Built a new client number on Fiserv and moved all accounts from the existing location to the new client number.

The results

Despite the complexity, we seamlessly transferred all accounts and began servicing in 180 days.