Bank of America has sold a $700-million chunk of its credit card portfolio to U.S. Bank, according to a press release by Elan Financial Services, the division of U.S. Bancorp that will manage the portfolio. Bank of America has announced it is planning to get out of the role of being an agent bank credit card operation within the next year.
U.S. Bank's Elan will own the assets of the new portfolio, which was purchased from Bank of America's FIA Card Services, but B of A plans to retain a subtle role of marketing and branding support to the 28 banks and financial institutions that are part of the portfolio, and plans to continue issuing the credit cards under the names of the banks and financial institutions, which include financial services firm Edward Jones. Bank of America also issued the cards on behalf of the other organizations but is selling assets and aims to be out of the agent bank business at the end of 2012.
Bank of America will continue to issue other credit cards, but company spokeswoman Betty Riess told the Minneapolis Star Tribune that "we decided earlier this year that agent bank card business ... wasn't core to our goal of building deep relationships with consumers."
The sale comes at a time when U.S. Bank is looking to expand its role into the agent banking business. In the last six years, the Star Tribune reports, it has acquired more than 300 cards. Elan also issues co-branded credit cards for such retailers as REI, Kroger grocery stores and Toyota. The terms of the agreement were not disclosed. According to the press release, Elan is advising any customers who hold FIA cards to continue using their current credit cards until it reissues them in the middle of 2012.