GE Capital will service but not securitize the credit card collateral it recently acquired from J.C. Penney, according to a source at the firm, thus ending all asset-backed financing associated with the clothing retailer for the foreseeable future.

The sale of Penney's $3.8 billion to $4 billion card portfolio, underlines a trend among midsize and private label credit card providers to sell off their card function in what has turned into a costly, hyper-competitive business over the last year.

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