UPDATE: According to the WSJ, Bank of America Corp. is providing an equity investment to buy $2 billion of Countrywide Financial Corp.
The top four banks (which are also represented as defendants in our antitrust price-fixing merchant interchange litigation) announced today they are borrowing $2 billion directly from the Fed, which can be seen as a sign of liquidity problems.
We cannot help but wonder whether the banks will wield their unbridled power to tap their $40 billion annual merchant interchange fee windfall treasure to help reduce their growing credit crisis. With the deepening mortgage meltdown, will the banks again storm their interchange cash cow vault?
The credit card companies have been regularly hiking their interchange fees. But, with many financial institutions facing a credit shortage and onerous liquidity shortfalls, interchange fees might be one way to bail themselves out at the expense of their retail and cardholder customers. We certainly will not tolerate such a move and are closely monitoring our mail to see whether interchange fees are poised to again rise.
[Source: WayTooHigh.com]
