David Balto

The political change in Congress probably leads many credit card executives to imagine it could not be worse. Month after month, card executives have been dragged before congressional committees to justify alleged deceptive and fraudulent practices. Consumers also have testified on how their lives have been turned upside down by card schemes.

Perhaps one of the most significant changes in the past year is the conversion of MasterCard into a for-profit company and the prospective conversion of Visa. Since Visa and MasterCard have been two of the most successful nonprofit association-based joint ventures, people have questioned, is this some seismic shift? And what is the long-term effect of this organizational change?

Regulatory action in numerous other countries from Australia to the United Kingdom is focusing on the impact of interchange fees and other apparently restrictive practices of card associations. The result of these actions establishes new precedent and offers guidance to regulators and courts in other countries.