Many credit unions that sold their credit card portfolios in 2006 and 2007 and entered into agent issuing agreements should start actively considering those agreements in 2011 and 12, according to CU card consultants.
"A credit union with an agent issuing card agreement should not begin considering whether it wants to renew that agreement one month before it rolls over," said Willie Koo, CEO of Asset Exchange, a leading CU credit card brokerage and consultancy that is a subsidiary of card processor FIS. "Instead they should begin taking stock of that program and what their options might be well before."
Koo and other consultants said the first step is for a credit union with an agent issuing agreement to find out when that agreement rolls over and how much of a notification period it has. A notification period is the length of time that a credit union has to communicate to the the issuer that it is not prepared to renew the existing contract.
Even if a CU intends to lengthen its stay with that issuer, the first step in negotiating new terms is signaling that it is fine walking away, explained Tim Kolk, a CU card consultant, broker and founder of TRK Advisors.
The first step, after finding out when the notification period starts, is to determine what an acceptable agent issuing agreement would look like and then to ask how well the existing relationship matches that ideal, he explained.