Visa Converts CU, Bank Shares To Reload Litigation Reserves
SAN FRANCISCO – Visa said it completed the conversion of $400 million worth of its Class B shares owned by credit unions and banks to boost its litigation reserves, expected to fund a payout of pending antitrust suits.
The additional funds bring the litigation reserves to $3 billion.
Under the terms of Visa’s 2007 initial public offering, which turned the card giant from a credit union and bank-owned cooperative, credit union- and bank-owned shares are subject to regular conversion in order to fund ongoing legal settlements.
Visa, along with MasterCard, is in the process of settling an antitrust suit brought by the U.S. Department of Justice over the two card companies’ anti-steering bylaws, which bar merchants from steering consumers to cheaper forms of payment. A group of merchants has filed a separate class action suit making similar claims against the two companies as the government’s antitrust action.