PURCHASE, N.Y. - (09/01/05) -- MasterCard Inc., the number two cardcompany, beleagured over the last two years by legal setbacks, saidWednesday it plans to raise more than $1 billion in new capitalwith an initial public offering. The card association, which isowned by 1,400 banks and credit unions, plans to sell 59% of thecompany to the public in a new stock issuance. The public offeringwill be part of a corporate restructuring that will entailappointment o a new board of directors, a majority of which will beindependent members, and the creation of a charitable foundation.The move comes as MasterCard and Visa USA are paying off a combined$3 billion antitrust settlement and face new lawsuits filed byAmerican Express Corp. and Discover Financial Services seekingdamages stemming from anti-competitive practices that preventedbanks from offering rival cards. An unfavorable verdict could costMasterCard and Visa hundreds of millions of dollars as suits filedunder antitrust laws can seek triple damages.
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The bank is launching KeyVAM, a virtual account management offering it designed with fintech Qolo. Both companies said the nature of the relationship was as important as the technology it produced.
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The top five bank holding companies have combined total credit card loan portfolios of more than $705 billion.
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Harmonizing standards for liquidity coverage ratios and discount window pledges could prevent the type of strains that led to last year's bank failures, according to a new paper whose authors include former Federal Reserve Govs. Dan Tarullo and Jeremy Stein.
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Ally Financial ended a six-month search for its next chief executive by hiring Discover CEO Michael Rhodes. The move adds a new wrinkle to Discover's pending sale, though Discover said that Rhodes hadn't been expected to have a long-term role at Capital One following the merger's completion.
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The report seeks to help banks "disrupt rapidly evolving AI-driven fraud," according to Treasury's Nellie Liang. The report found banks have difficulties accounting for AI risks.
March 27 - Yahoo Finance Feed
The banking giant has launched an online platform that links small-business owners and entrepreneurs in need of capital to community development financial institutions. The platform was developed in partnership with Community Reinvestment Fund USA.
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