AFL-CIO Credit Card Deal Would Mean Cash

In a deal that would bring the labor movement at least $375 million in the next five years for organizing drives and other campaigns, the AFL-CIO has reached a preliminary agreement with a financial services firm on a new credit card program for union members.

AFL-CIO spokesman Ray Abernathy said Thursday that the tentative pact is a model for innovative ways that unions can use their buying power and investments to further their aims.

The $375 million in royalties from the program would be split among the AFL-CIO and its 79 member unions. With the AFL-CIO’s current annual budget at roughly $70 million, the funds would represent a major infusion that could finance such initiatives as the federation’s recently announced grass-roots political program.

The AFL-CIO’s executive council, concluding its four-day meeting here, authorized the labor federation to negotiate a final agreement with Salinas, Calif.-based Household Credit, a unit of the giant finance company Household International. The AFL-CIO’s current credit card arrangement with Bank of New York, which expires in a year, has produced insignificant revenue for the labor federation, officials said. It has provided credit cards to 2 million of the 13 million union workers affiliated with the AFL-CIO.

Under the new card program, striking workers could go up to six months without having to pay their principal or interest on their accounts. Household Credit also agreed not to oppose union organizing of its workers.

Separately, the AFL-CIO executive council approved a reorganization that will close four to six of its 12 regional offices. Officials said the fate of the Los Angeles office has not been determined.