Visa Converts More CU Shares As Antitrust Settlement Planned

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SAN FRANCISCO – Visa said this morning it is converting another $400 million of its Class B shares owned by credit unions and banks to replenish to its litigation fund that is expected to be used to pay a settlement in a pending antitrust suit.

Visa and MasterCard agreed in October to settle antitrust claims brought by the US Justice Department that the two conspired to limit competition by barring merchants from steering transactions to lower-cost cards or cash. A similar case brought by merchants against the two card giants is still pending.

The additional $400 million will bring the amount in the Visa litigation fund to almost $3 billion.

The litigation fund was part of Visa’s 2007 initial public offering which awarded credit union and bank owners of the card company Class B shares that are available to fund litigation settlements. The Class B shares were previously converted to pay $3 billion to AmericanExpress and Discover in a 2007 settlement of an antitrust suit over Visa’s and MasterCard’s exclusivity provisions barring card issuers from offering competitors’ cards.

Visa and MasterCard are the only two common stocks widely owned by credit unions. Visa’s Class B shares owned by credit unions are not publicly traded but are convertible into publicly traded Class A shares upon approval by Visa.

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