Welcome to - Information on Apply for wal mart credit card

Northwestern Financial Review - Credit card suit takes early, unexpected turn

I was very surprised that MasterCard and Visa settled with Wal-Mart and the other merchants recently. The trial, scheduled to open April 28, hadn't even gotten underway when MasterCard settled. Facing a defense on its own, Visa settled two days later.

The day before the trial started I received an elaborate media kit from MasterCard providing background on the case. It speculated that the trial would run about three months. Things must have developed awfully quickly if MasterCard sent out media kits about its defense one day and then the next day it settled out of court for $1 billion in damages.

The damages are somewhat puzzling. Visa agreed to pay $2 billion, twice what MasterCard agreed to, which seems too low given that Visa controls so much more of the debit card market than MasterCard. Either MasterCard's settlement is too much or Visa's is too little. It is my understanding that Visa and MasterCard have been reserving for possible damages for years.

The other question is who is going to get the damages. The money should go to consumers, not merchants. Although merchants say they are the ones who paid more, we all know how merchants handle higher costs - they pass them onto customers. Are prices going to go down when merchants get those settlement checks? I'm not holding my breath.

In the build-up for this case, which has been in the making since 1996, Visa and MasterCard downplayed the difference between their debit and credit cards, emphasizing their belief that customers see simply "Visa" or "MasterCard." They wanted merchants to take anything with their logo on it. But the court apparently didn't see it that way, noting that debit and credit cards are distinct products. Just like a merchant can choose to sell Pepsi without being required to sell Diet Pepsi, the court felt the merchants should be able to distinguish between the two kinds of plastic.

At this point, violation of the "honor all cards" rule means that merchants will be able to refuse the signature-based debit cards offered by Visa and MasterCard. The path to point of purchase just got a lot smoother for PIN-based debit cards, which are likely to proliferate because many customers will still want to use debit cards.

The fear is that violation of "honor all cards" will mean even more. Will it mean that merchants will start accepting Visa cards issued by some banks but not by others? Buying the slippery slope argument, some say yes. That would be disastrous for small banks. But the truth is we don't know, and if merchants begin heading down that road, we could have another lawsuit to watch.

. . . The FDIC advisory board met at the Seidman Center in Arlington, Va., on April 22. The day-long meeting was the second for the committee that Chairman Donald Powell created last year. Terry Jorde, president of CountryBank USA of Cando, N.D., who serves on the advisory board, said the meetings have been largely informational.

"One thing I learned from the FDIC staff is they have tremendous respect for Chairman Powell," Jorde said. "They told me that we bankers have a huge advocate in him."

Jorde said the FDIC wants to develop systems that monitor indicators of future industry performance, rather than relying so much on call reports, which show past performance.

Jorde said the long-term purpose of the advisory board remains undefined. She said, however, that she expects the agency may call on advisory board members to offer testimony at Congressional hearings that affects issues relevant to the FDIC.

. . . ?First Federal Capital Bank of La Crosse, Wis., buys entry into the correspondent banking market with its announced purchase of Liberty State Bank of St. Paul. Jim Russell heads up the Liberty correspondent banking service.

"One of First Federal's objectives is to enhance their capability in commercial lending, since they have not been a commercial lending organization to a great degree," Russell said. "They like the idea of buying loans from other banks the way we've been doing it and they intend to continue doing that."

The acquisition, which was announced last month, is expected to be complete in the third quarter.

. . .I have a hard time feeling sorry for the NWA Federal Credit Union, which is being evicted from property owned by Northwest Airlines. The credit union is Minnesota's largest. Northwest Airlines says it no longer wants to subsidize an organization that made $20 million last year. The airline is right on, and taxpayers should feel the same way. Why should taxpayers subsidize one of the largest and most profitable financial institutions in the state? If NWA Credit Union were taxed like a bank, it would pay more than $5 million in income taxes. Congress should put an end to the free ride and apply standard federal income tax rules to the nation's largest credit unions.