Squeezed by new rules that make debit cards less profitable and awash in deposits that they must put to work, regional banks and community lenders are making a big push into credit-card lending, often diving back into a business they had exited years before amid the onslaught of bigger players, the Wall Street Journal reported today. Consumers have been paring the use of cards while they get their finances in order, while large banks have been shrinking card portfolios to meet new capital requirements, potentially giving smaller lenders an opening. Among the banks making a new push to sell credit cards: M&T Bank Corp. of Buffalo, N.Y.; Regions Financial Corp. of Birmingham, Ala.; Sovereign Bank, a unit of Banco Santander SA of Spain; and Huntington Bancshares Inc. of Columbus, Ohio. One of the big reasons behind the push by smaller banks is a desire on the part of lenders to sell more products to existing customers. Such marketing is one way banks hope to increase revenue in a world in which interest rates are likely to be stuck near zero for the foreseeable future. The Fed has said it plans to keep rates at "exceptionally low levels" at least through late 2014.
