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Credit card majors face anxiety over decline in lobbying costs

[Monday, January 24th, 2011]

As per the analyst report, Visa Inc, Discover Financial Services, and American Express are getting increasingly anxious, as the lobbying charges have declined sharply during the third quarter of 2010. However, the lobbying charges have risen for MasterCard. Visa has reportedly spent over $1.94 million during the 3rd quarter of 2010. Discover reportedly spent $0.23 million and the American Express $0.46 million all for lobbying during the same period.

The lobbying costs for Visa declined around 28% each year from $1.53 million and it decreased by half for Discover. The lobbying costs for American Express declined 29% each year, but for MasterCard it surged to 24% each year from $0.68 million and declined from $2.33 million drastically in the sequential quarter.

Visa had lobbied with the Federal Reserve System, Congress, as well as the Federal Trade Commission on credit card regulations, merchant fees, as well as the creation of the consumer protection agency.

While MasterCard lobbied with the Federal Government, American Express lobbied with the Congress, and Discover lobbied with the House of Representatives as well as the senate on many issues that were related to card lending, fees, and other financial regulations.

In the long run the repercussions of the financial reforms will be felt as it has already begun to surface. Although the new rules will offer card users the protection, hike in interest rates will have adverse effects on the issuers’ profits.

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