An online banking service offered by the Nebraska Alumni Association that was very unpopular with the state’s bankers has apparently not been all that popular with alumni, either.

Andrea Cranford, communications director for the Alumni Association, said no decision has been made on whether the program will continue past February 2009, when the contract for it expires, but she said it wouldn’t surprise her if it is discontinued.

“It’s not a big revenue producer,” said Cranford, noting that the banking service is not among the association’s most popular affinity programs.

The program, set up for the Alumni Association by California-based Affinity Financial Corp. and run through Indiana-based Sky Bank, provides services such as online bill-paying, free checking and competitive rates for money market accounts and certificates of deposit. At the time the contract was signed it was only the second alumni association deal of its kind in the country.

The lack of success of the program among alumni is likely due in part to the ire it drew from Nebraska banks .

Earlier this year, The Nebraska Banker’s Association criticized the Alumni Association program, saying its members were “extremely disappointed” that the Alumni Association had chosen to compete against the state’s banks, which had “aggressively supported the University of Nebraska for countless decades.” 

At the time, Banker’s Association President George Beattie called the program, “bad for Nebraska.”

Beattie was much more reserved in an interview Thursday, saying his issues with the Alumni Association had largely been resolved months ago, after the association agreed to stop marketing the program in Nebraska.

Nate Eckloff, president of the Alumni Association’s board of directors, said the decision to stop advertising the program in Nebraska had likely had an effect on its success.

“Clearly that would have an impact,” he said.

Eckloff said he was “absolutely certain” the contract will be reviewed when it comes up for renewal, although he stopped short of saying it would be discontinued or modified.

Beattie said he had been “led to believe” that the Alumni Association will discontinue the service after its contract expires.

“We’re hopeful that they will discontinue it,” he said.

If the contract is not discontinued, Beattie said, “I guess we’ll see if we still have issues.”

The state’s bankers weren’t the only ones who had issues with the program.

It had also run afoul of the Nebraska Department of Banking and Finance because of laws in the state governing what institutions can call themselves banks.

John Munn, the department’s director, said the Alumni Association cooperated with his department’s inquiries and agreed to stop referring to the service as the Nebraska Alumni Banking Center on its Web site.

The Web site now refers to it as the Nebraska Alumni Financial Center, although it appears that change did not alter any services it provides.

Munn said the two sides were still negotiating on some other issues, which he declined to describe, and that he expected all issues to be resolved within a couple of weeks.

If the Alumni Association does decide to end its online banking program, it would be the second controversial affinity program to be canceled.

The association’s deal with Lincoln student lender Nelnet to market student loan consolidation services to alumni was terminated by the company several weeks ago after the federal government moved to ban such deals.

Neither Nelnet nor the Alumni Association would reveal how much the contract was worth, but a Senate report released earlier this month said Nelnet paid the association nearly $1 million over the duration of the contract.

Eckloff declined to say whether either the banking or Nelnet deals had anything to do with the recent departure of Alumni Association Executive Director Ed Paquette, who took a leave of absence Monday and is not expected to return.

Eckloff said both the association and Paquette had agreed not to talk about the situation until it reaches a final resolution.

Reach Matt Olberding at 473-2647 or molberding@journalstar.com.