Bank of America Leaving Agent Card Issuing
Bank of America is leaving the business of issuing credit cards on behalf of credit unions.
Typically the bank's card issuing arm, FIA Card Services, has purchased credit card portfolios from credit unions and then continued to issue the cards in the credit unions' names, often in five-year contracts.
But sources in the card industry say the bank has concluded that the agent card issuing business is no longer key to its core operations and has decided to discontinue it.
Credit unions which currently issue cards with Bank of America have also been told that their contracts will not be renewed after they expire.
Card industry sources estimate that the move will leave between 40 and 50 credit unions around the country with the need to either find another agent issuer or to start re-issuing cards themselves.
Bank of America was once a leader in the agent issuing market, building on the work of MBNA, a mono-line card issuing bank that Bank of America purchased in 2006. Subsequent to the merger, Bank of America launched FIA card services while retaining the MBNA name for agent issuing in Canada and Europe. But the bank has taken a steadily smaller role in the U.S. market, declining to purchase many smaller portfolios and not renewing some agent issuing contracts.
In a statement about the strategic shift, Bank of America said that it had decided "agent-bank relationship, where we issue cards n behalf of other financial institutions, was not core to our goal of building deeper relationships and we began the process of exiting those relationships. In many cases, our agent-bank business has serviced predominantly single-service card customers with limited opportunity for Bank of America to do more business with them," the bank added.