CU Cards: BofA Makes a Hasty Exit
Bank of America made official last week what many anticipated when a spokesperson acknowledged that it will no longer issue credit cards in agent relationships with credit unions and smaller banks.
During the height of the CU card sale market, from 2004 to 2007, Bank of America's card-issuing arm, FIA Card Services, and its predecessor, MBNA, dominated the market for CU-issued credit cards.
Industry sources explained that it would be difficult to tell what the former BofA agent credit unions would do in the wake of the bank's departure, since each CU's contract was different. In addition, some of the credit unions were no longer in agent contracts with the bank since the contracts had already lapsed, the sources said.
Essentially, the credit union could buy its portfolio or card accounts back from BofA and take them in-house, sources said. But they added that the bank was a charging a $1 million deconversion fee and often at a premium so that option tended to be expensive.