After a long absence, Bank of America Corp. is bringing its U.S. consumer credit card portfolio back to the processor Total System Services Inc.

Bank of America ended its earlier contract with TSYS after it closed its 2006 purchase of MBNA Corp., which allowed B of A to take its consumer card processing in-house. TSYS estimated at the time that B of A provided 8.7% of its 2005 revenue. TSYS, of Columbus, Ga., continued to handle B of A's commercial cards.

TSYS would not say how much revenue B of A's consumer portfolio will provide under the new contract, which it announced July 19.

"At the time that we did the MBNA conversion, it was really the right decision … to consolidate our combined operations," says Maureen Sierocinski, B of A's product operations executive for consumer and small-business banking.

But today, "given the aging technology that we're currently on as well as the rapidly changing technology, especially around a lot of the regulatory enhancements that we need to make, it just made more sense to look at alternatives," she says.

After a minimum six-year term, Bank of America has the option to take its processing back in-house while licensing TSYS's TS2 software. Such an arrangement has a precedent in JPMorgan Chase, which in 2007 took its processing in-house while continuing to use TSYS's software.

"If our strategic direction changes, we have that option" to process in-house again, but it is too early to predict whether B of A will choose to do so, Sierocinski says.

In addition to TS2, B of A agreed to use customized systems for risk and financial management and business intelligence, TSYS said in its announcement. TSYS expects to complete its conversion of B of A's portfolio in mid-2014.

Bank of America is retaining control of card issuance, statement delivery and rewards management, Sierocinski says. It is also keeping its servicing and operational platforms in-house.

B of A plans to retire some of its technology and would likely make reductions to its headcount by the end of the 24-month transition back to TSYS, Sierocinski says, but it is too early to determine the extent of those reductions.

"We are thrilled that Bank of America has decided to bring their consumer card processing business to TSYS … they are one of our most respected clients," said TSYS chairman and chief executive Philip W. Tomlinson in a press release.

TSYS would not make an executive available for an interview, citing the proximity of its earnings announcement next week.

The earlier loss of the Charlotte issuer's consumer business cast a shadow over TSYS's earnings for several quarters. B of A provided TSYS with a $69 million termination fee, but "it's cash we frankly wish we would never get," Tomlinson said in 2006.

"There is no one silver bullet that can replace Bank of America's consumer business," he said at the time.

Though B of A gave TSYS 10 months' notice, the processor was unable to fully cut costs in anticipation of B of A's departure. "We have to service these accounts until the very last day they are here," Tomlinson said at the time.

Analysts praised TSYS for generating impressive earnings shortly after it lost much of the processing business it had from B of A and JPMorgan.

"Our results … show what hard work, dedication, and commitment can do," Tomlinson said in a 2007 earnings call.