Visa, MasterCard rally on Durbin deal
June 21, 2010: 4:00 PM ET
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Maybe the credit card crackdown won't hit Visa and MasterCard so hard after all.
Shares of the companies rose after Sen. Richard Durbin, D-Ill., said that members of the House financial reform conference committee agreed to changes on his plan to reform the markets for credit and debit card transactions.
One shift limits the Federal Reserve's authority to regulate the fees Visa (V) and MasterCard (MA) charge on their networks, a change one analyst dubbed "a tremendous victory for Visa and MasterCard."
The companies, which operate card networks and collect billions of dollars in fees on transactions, saw their shares rise as much as 8% in afternoon trading.
Even so, Durbin said the compromises strengthen the bill.
"I'm pleased that we were able to reach an agreement which makes minor changes to strengthen consumer protections and bring competition to a market where there is none," Durbin said.
Notably, the Senate measure had prohibited restrictions on discounts merchants might offer to encourage the use of MasterCard over Visa, or vice versa.
