Visa has two membership rules that prevent competitors American Express Co. and Dean Witter, Discover & Co. from getting a toehold in the bank card association.

In 1989, it adopted a bylaw declaring American Express and Dean Witter ineligible for Visa membership.

At that time Sears' Greenwood Trust, a Dean Witter subsidiary, had attempted to join the association.

Then in January 1991, Dean Witter challenged the rule by suing Visa for denying membership to Mountain West Financial, a failed thrift that Dean Witter had bought in 1990 for the purpose of issuing Visa cards.

In March 1991, Visa adopted another bylaw, which said: "The membership of any member will terminate in the event that its parent or subsidiary or affiliate issues directly or indirectly Discover cards or American Express cards or any other card deemed competitive."

An industry source close to those proceedings said that the full impact of the latter bylaw was not realized at the time because the lawsuit focused on whether Dean Witter could be a Visa member, not whether a Visa member could be expelled for being affiliated with Dean Witter.

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