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Premier Bankcard will close its Spearfish location July 23, company officials announced Thursday, eliminating 330 jobs in the Northern Hills community.
Miles Beacom, president and chief executive officer of the Sioux Falls-based credit card company, said the decision comes as a direct result of federal regulations that went into effect in February 2010. The regulations restrict how and when fees can be assessed on accounts. Premier specializes in providing cards to people with damaged or bad credit.
"It took away our ability to price the card for the risk," Beacom said. "We've been testing a number of products that just have not performed."
Premier Bankcard also operates locations in Sioux Falls, Dakota Dunes, Watertown and Huron. Employees at the Spearfish office handled collections and customer service, tasks that will be redistributed among the remaining locations, Beacom said.
Premier has not hired any new employees in its credit card division since September 2009, he said. With the Spearfish closing, the company will employ about 1,600 people statewide, down from 3,000 before the Credit Card Accountability, Responsibility and Disclosure Act was approved by Congress.
Beacom said the Spearfish location was chosen for elimination, in part, because it was the furthest from the Sioux Falls headquarters. According to a news release, severance packages will be offered to employees "who continue to meet performance standards," and the company is also working with state agencies to provide job transition assistance.
"We had an incredible team in Spearfish that went above and beyond everything that was asked," Beacom said. "It's a very sad day not only for Spearfish but for South Dakota."
Spearfish Mayor Jerry Krambeck echoed Beacom and said losing Premier Bankcard will be "devastating" for the entire Northern Hills.
At its peak, Premier was one of the biggest employers in the city and has counted Krambeck among its employees for the past 10 years.
"Premier has been a wonderful employer and has invested so much in our region," Krambeck said. "It's sad that federal legislation brought this issue to our community."
His coworkers were notified of the decision Thursday, he said.
"My heart is with all of my fellow employees and their families," Krambeck said. "I ask our communities to give support to those greatly affected during these challenging times."
Beacom said the company remains financially strong. Premier also is taking on third-party collections in an attempt to diversify. While in the early stages of the process, it will give the company an opportunity to grow, he said.
"We continue to serve millions of customers nationwide in addition to testing various products and exploring other business lines," Beacom said in a prepared statement.
Mike Keller, dean of the Beacom School of Business at the University of South Dakota, said he estimates it could be another six to nine months before clarity is reached on what regulators will allow.
Sioux Falls-based Total Card, which typically marketed credit cards to people with damaged credit, also is getting into third-party collections and general call-center services.
Total Card bank president Greg Ticknor said the credit card reform law has affected his business, but it hasn't had any layoffs as a direct result.
"Since the card act was signed by the president, we have not hired additional employees for credit card servicing," Ticknor said. "We have not been marketing credit cards since then."
Premier, which is the sister company to First Premier Bank, has been slowly downsizing its employee base, mostly through attrition, in past years. The Spearfish center, which at one time employed 550, will close in July and leave Premier with about 1,600 employees company-wide.
The Sioux Falls Argus Leader contributed to this report
Contact Emilie Rusch at 394-8453 [email protected].
Read more: http://rapidcityjournal.com/news/article_3cd87820-827a-11e0-9ad8-001cc4c03286.html#ixzz1SBHAFJmr
Miles Beacom, president and chief executive officer of the Sioux Falls-based credit card company, said the decision comes as a direct result of federal regulations that went into effect in February 2010. The regulations restrict how and when fees can be assessed on accounts. Premier specializes in providing cards to people with damaged or bad credit.
"It took away our ability to price the card for the risk," Beacom said. "We've been testing a number of products that just have not performed."
Premier Bankcard also operates locations in Sioux Falls, Dakota Dunes, Watertown and Huron. Employees at the Spearfish office handled collections and customer service, tasks that will be redistributed among the remaining locations, Beacom said.
Premier has not hired any new employees in its credit card division since September 2009, he said. With the Spearfish closing, the company will employ about 1,600 people statewide, down from 3,000 before the Credit Card Accountability, Responsibility and Disclosure Act was approved by Congress.
Beacom said the Spearfish location was chosen for elimination, in part, because it was the furthest from the Sioux Falls headquarters. According to a news release, severance packages will be offered to employees "who continue to meet performance standards," and the company is also working with state agencies to provide job transition assistance.
"We had an incredible team in Spearfish that went above and beyond everything that was asked," Beacom said. "It's a very sad day not only for Spearfish but for South Dakota."
Spearfish Mayor Jerry Krambeck echoed Beacom and said losing Premier Bankcard will be "devastating" for the entire Northern Hills.
At its peak, Premier was one of the biggest employers in the city and has counted Krambeck among its employees for the past 10 years.
"Premier has been a wonderful employer and has invested so much in our region," Krambeck said. "It's sad that federal legislation brought this issue to our community."
His coworkers were notified of the decision Thursday, he said.
"My heart is with all of my fellow employees and their families," Krambeck said. "I ask our communities to give support to those greatly affected during these challenging times."
Beacom said the company remains financially strong. Premier also is taking on third-party collections in an attempt to diversify. While in the early stages of the process, it will give the company an opportunity to grow, he said.
"We continue to serve millions of customers nationwide in addition to testing various products and exploring other business lines," Beacom said in a prepared statement.
Mike Keller, dean of the Beacom School of Business at the University of South Dakota, said he estimates it could be another six to nine months before clarity is reached on what regulators will allow.
Sioux Falls-based Total Card, which typically marketed credit cards to people with damaged credit, also is getting into third-party collections and general call-center services.
Total Card bank president Greg Ticknor said the credit card reform law has affected his business, but it hasn't had any layoffs as a direct result.
"Since the card act was signed by the president, we have not hired additional employees for credit card servicing," Ticknor said. "We have not been marketing credit cards since then."
Premier, which is the sister company to First Premier Bank, has been slowly downsizing its employee base, mostly through attrition, in past years. The Spearfish center, which at one time employed 550, will close in July and leave Premier with about 1,600 employees company-wide.
The Sioux Falls Argus Leader contributed to this report
Contact Emilie Rusch at 394-8453 [email protected].
Read more: http://rapidcityjournal.com/news/article_3cd87820-827a-11e0-9ad8-001cc4c03286.html#ixzz1SBHAFJmr
