GLG News by Bankruptcy Experts: Lawyers (EU)

Duncan MacDonaldConsultantDuncan McDonald

Football decision jeopardizes bankcard interchange

May 24, 2010

Analysis of:Supreme Court Revives Antitrust Suit Against NFL | online.wsj.com

The Supreme Court today opened the door to allow a greater application of antitrust law to joint ventures. The joint venture here is the National Football League and it is replicated in scores of similar JVs across the economy. The Visa and MasterCard networks were JVs until recently. The NFL decision suggests that when they were, their product distribution and pricing practices would have been subject to antitrust scrutiny under a reasonableness standard.

Duncan MacDonaldConsultantDuncan McDonald

Senate balkanizes retail banking

May 19, 2010

Analysis of:Senate amendment broadens states' leeway in cases against national banks | www.washingtonpost.com

The latest amendment to the bank reform bill before the Senate will modestly open the door to state Attorney's Generals to enforce state and federal laws against banks that sell loans across state lines, like credit cards. In effect, it would dent the historically impregnable wall known as preemption -- the power of the feds to prevent law enforcement against federally chartered banks by states and private parties.

Duncan MacDonaldConsultantDuncan McDonald

Credit card interest rate caps?

May 18, 2010

Analysis of:Banks Face New Threat to Credit Cards in Reg Reform Bill - American Banker Article | www.americanbanker.com

The article is about an attempt by a House member to require that credit card APRs be determined by state and not federal law. Most credit cards are priced according to a uniform rate based on the state headquarters of the creditor. Issuers like Citi, BofA, Macy's, et al export market determined rates from places like South Dakota, Delaware, etc. -- states with liberal statutes that do not cap APRs. Pricing by state would reduce APRs in half the states and thus issuer revenues.

Duncan MacDonaldConsultantDuncan McDonald

Impact of debit card fee legislation exaggerated

May 16, 2010

Analysis of:Shares fall on debit card fees plan | www.ft.com

An amendment to the bank reform bill in the Senate would reduce debit card interchange fees that benefit bank card issuers and indirectly Visa & MasterCard. Media reports, including this one, are estimating its cost to the bankcard industry in the billions. Are they on target or overdoing it?

Duncan MacDonaldConsultantDuncan McDonald

EU bankcard interchange fee settlement: US ramifications

April 26, 2010

Analysis of:Visa Europe to Cut Debit-Card Fees | online.wsj.com

Visa Europe has settled the EU's antitrust action against its major debit card interchange fees. It will reduce them by up to 60% The settlement does not cover credit card interchange. And it has nothing to do with the interchange lawsuits in the US. Visa Europe is an independent company with a license from Visa, Inc. to sell its products.

Duncan MacDonaldConsultantDuncan McDonald

Our $48 Billion Credit Card Bill

April 21, 2010

Analysis of:Op-Ed Contributor - Our $48 Billion Credit Card Bill | www.nytimes.com

That's the title of an op-ed in today's New York Times that argues in favor of reducing bankcard interchange pricing to zero from an alleged $46B per annum currently. Its aim is not the class action antitrust lawsuit in a federal court in Brooklyn on the matter. Instead, it wants Congress to amend the bank reform bill to force that result. The author says nothing about the probable consequences, were the law to pass, for banks, taxpayers, cardholders.

Duncan MacDonaldConsultantDuncan McDonald

Are the lawsuits against Toyota a blessing in disguise?

March 15, 2010

Analysis of:Lawyers Vie for Lead Roles in Toyota Lawsuits | online.wsj.com

The article is about the pending consolidation of the scores of lawsuits filed against Toyota across the US related to its sudden acceleration problem. The key aim of the plaintiffs' lawyers is to ensure that a favorable court is chosen to try the consolidated case. That is, a court that will have a favorable judge and a jury the lawyers can manipulate, and that will support certification of the case on a class basis. Toyota's lawyers will want the opposite, except perhaps on the class issue.

Duncan MacDonaldConsultantDuncan McDonald

Trial of price fixing suit threatens bankcard interchange lawsuit

January 14, 2010

Analysis of:Recorded Music Price-Fixing Suit Reinstated | online.wsj.com

The 2nd Circuit Court of Appeals has ordered a trial of a price fixing lawsuit involving two music industry joint ventures. The case is important to the bankcard industry because it is facing a multi-billion dollar antitrust class action over the interchange prices Visa and MasterCard (each a joint venture) impose on merchants that accept their cards. That case is also under the jurisdiction of the 2nd Circuit.

Duncan MacDonaldConsultantDuncan McDonald

NFL Supreme Court case should worry bankcard networks

January 14, 2010

Analysis of:Supreme Court Skeptical of N.F.L.'s Antitrust Claim - NYTimes.com | www.nytimes.com

The issue yesterday before the US Supreme Court was whether the National Football League should be treated as a "single entity" for antitrust purposes. The outcome would determine how far a joint venture like the NFL can go in limiting member business practices, e.g., via exclusive dealing arrangements. Prior to their IPOs, Visa and MasterCard were JVs that set interchange pricing that has been challenged in an antitrust lawsuit.

Duncan MacDonaldConsultantDuncan McDonald

Visa's Image-making: Marketing or Legal Defense?

December 30, 2009

Analysis of:Visa's Image Overhaul - US Banker Article | www.americanbanker.com

The article notes that Visa's new ads are the first of their kind since its IPO 2 years ago. Their goal is to influence the outcome of the interchange wars with its merchants (before Congress and in court) and to cause public and private sector VIPs to recognize that it is not an issuer of bad old credit cards. The ads do not state why it took Visa so long to put on a better face.

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