There are signs that credit unions may soon face more competition from local credit card issuers.

More than two decades ago, regional and community banks began selling their credit card portfolios to larger national banks and monoline card issuing banks, such as MBNA which later became FIA, a subsidiary of Bank of America. 

At the time, many regional and community banks believed they lacked the resources and expertise to compete against the national banks on cards and that they would profit more from participating in an agent issuing program.

This trend also took place among credit unions as well, but to a much smaller extent.

Now, according to media reports, regional and community banks have moved away from agent issuing and more toward launching their own card programs again.

Factors influencing their decisions include increased liquidity available for lending combined with lower credit card loan defaults and greater experience available in credit card program management and underwriting.

Should the trend continue, credit unions may find that they have more competition for the market for truly local card issuers, a niche they have occupied almost alone for some time.