NEW YORK - (05/05/06) A broad group of merchantsamended its antitrust suit against Visa, MasterCard and severalmajor banks alleging the companies conspired to fix prices indebit, as well as credit card markets. The complaint, originallyfiled last November, alleges that Visa and MasterCard are able toset interchange fees without regard to market forces. Webelieve that price fixing of interchange is equally as problematicin debit cards as it is in credit cards, said Henry Armour,president of the National Association of Convenience Stores, one ofthe parties to the suit. Visa and MasterCard, both controlled bylarge banks, control an estimated 85% of the $30 billion a yearmarket in interchange fees. The suit was brought by the MerchantsPayments Coalition, a coalition of 20 trade associations thatrepresents retailers, restaurants, supermarkets, drug stores,convenience stores, gas stations and on-line merchants.
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The Cleveland-based bank is projecting steady growth in net interest income even as credit losses remain manageable. But Chairman and CEO Chris Gorman also said that he thinks a recession is likely.
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The first-quarter increase involved commercial real estate loans, including some problematic multifamily loans and an office credit, but none of the criticized loans were to consumers, officials at the Dallas company say. Further CRE deterioration is anticipated.
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The Detroit-based company is exploring ways to make more consumer auto loans without running afoul of stricter capital standards that are expected from the Federal Reserve. Possible approaches include more securitizations and the use of credit risk transfers.
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The House Financial Services Committee also sent to the full House two bipartisan bills, including one that would prevent large banks from opting out of having to recognize Accumulated Other Comprehensive Income in regulatory capital.
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Charge-offs and nonperforming loans rose at the Georgia bank in the first quarter. But it blamed the problem on one large client and said the matter has been resolved.
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Amid healthy first-quarter loan growth and improving credit quality, Discover Financial Services slashed its profits by $800 million to offset remediation costs from a 16-year period when it overcharged certain merchants.
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