A $600 million credit union that has been with FIA Card Servicesended an agent-issuing card relationship with that organization andis launching an agent-issuing program with Elan FinancialServices.

FIA Card Services is the card-issuing arm of Bank of America,and Elan Financial Services is a subsidiary of US Bancorp.

The Franklin Mint Federal Credit Union , headquartered inBroomall, Pa., had between 8,000 and 9,000 card accounts with FIA.The credit union has 65,000 members.

“We are excited to partner with Franklin Mint Federal CreditUnion and to continue to provide its members with a compelling cardprogram,” said Jeff Chernivec, senior vice president at ElanFinancial Services.

“We are very impressed with Elan's ability to be transparent inproviding best-in-class support for both employees and members,”said Allan Stevens, FMFCU vice president. “We look forward to usingElan's in-branch promotions and incentives, which we think will bekey factors in communicating the member value associated with thesecard products.”

The switch is notable for several reasons, not least the amountof time Franklin had with FIA.

Franklin Mint sold its card portfolio to MBNA in 2005 justbefore Bank of America purchased MBNA and turned it into FIA CardServices. At that time, the credit union expressed confidence inthe firm and said it would not attempt to change its contract eventhough Bank of America, not MBNA, was going to be its issuingpartner.

But the Bank of America's relationship was never a perfect fitfor the CU, although Franklin Mint was pleased with therelationship overall, according to Stevens.

He did not go into detail about the ways the FIA relationshipdid not fit as well as it might, but the giant card issuer signaledearly on that it was not as interested in agent card-issuingrelationships with small- and medium-sized credit unions as MBNAhad been. At one point, FIA executives confirmed that the largecard issuer was not going to buy credit union card portfolios belowa certain size, largely on the grounds they were not big enough tojustify the conversion costs.

Stevens explained that Franklin Mint had been looking at Elan asa potential issuing partner as part of its process to considerrenewing the contract with FIA. “We sold the portfolio in 2005, soour contract was coming up this year,” Stevens said. “We hadconsidered Elan a little bit when we had been looking at the firstsale but then gave them a second, closer look this time after weheard good things about Elan,” he added.

But the decision had become clearer after FIA told Franklin Mintthat it would not be interested in acquiring a 1,700-card portfoliothat Franklin Mint had taken on when it merged a smaller CU,Stevens explained. FIA's refusal to take on the 1,700 cards when italready had between 8,000 and 9,000 cards helped the CU betterunderstand the relationship.

“We concluded that FIA was really a better fit for us,” Stevenssaid.

The Franklin move caps what observers have called a mini-trendamong some CUs that wind up either going back into card issuing orswitching their agent issuing partner at the end of theircontracted period.

The number of credit unions who leave their first agent partneris small but not a fluke, according to one card industry executive.“It's definitely a minority, but it's a persistent minority” amongcredit unions that sold their cards to agent issuers, said anexecutive familiar with the industry. The executive declined to bequoted by name to protect relationships with both credit unions andcard issuers.

Further, the reasons a credit union and an issuer might splitare as varied as a shift in business models over the last fiveyears, a change in leadership on the part of the CU or the agentissuer or any number of problems, the executive said.

Another card issuing executive observed that it seemed like Bankof America might be getting out of agent issuing with creditunions, a suggestion that Bank of America spokesman Betty Reesedenied. “We are definitely interested in working with credit unionsand remain committed to our credit union partnerships,” Reese said,while declining to comment on the Franklin Mint Credit Unionmove.

But another credit card industry executive who declined to benamed because he was not authorized to talk to the press said heperceived some “drift” at FIA when it comes to contract renewals.If a credit union agent-issuing contract was allowed to roll over,FIA was fine with that, the executive commented. But if there was aproblem or a major change needed, Bank of America might let thecontract go.

Willie Koo, CEO of Asset Exchange, a credit union cardconsultant and brokerage that is a subsidiary of card processorFIS, declined to speak to the Franklin Mint decision but expressedno surprise that it had decided to switch.

Koo said that the firm, so far, had identified 22 credit unionsthat had sold their card portfolios in 2005 that had gone back intocard issuing. Of those 22, he said, 17 declined to renew theiragent-issuing agreements and had returned to card issuing.

Koo estimated that the numbers may continue to rise as well.Many of the credit unions that sold their card portfolios did sobetween 2005 and 2007 and any of those contracts will come up forrenewal in the next year to 18 months, Koo observed.

“Credit unions owe it to themselves and their members to pullthose contracts down from the shelf and take a good look at them,”Koo said. “Don't wait until the last month when you get a letterfrom the issuing partner that said the contract will roll over inanother month.”