There are signs that credit unions may soon face morecompetition from local credit card issuers.
|More than two decades ago, regional and community banks beganselling their credit card portfolios to larger national banks andmonoline card issuing banks, such as MBNA which later becameFIA, a subsidiary of Bank of America.
|At the time, many regional and community banks believed theylacked the resources and expertise to compete against the nationalbanks on cards and that they would profit more from participatingin an agent issuing program.
|This trend also took place among credit unions as well, but to amuch smaller extent.
|Now, according to media reports, regional and community bankshave moved away from agent issuing and more toward launching theirown card programs again.
|Factors influencing their decisions include increased liquidityavailable for lending combined with lower credit card loan defaultsand greater experience available in credit card program managementand underwriting.
|Should the trend continue, credit unions may find that they havemore competition for the market for truly local card issuers, aniche they have occupied almost alone for some time.
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