With the growing turmoil in the financial markets, due to unchecked risky loan schemes, we worry that the banks might use their market power to raise interchange fees. Is this possible? Because of the 80% monopolistic anti-competitive grasp that the credit card associations' member banks wield, we would not be surprised.
Angered, yes.
Surprised, no.
Just today, it was reported that Countrywide's stock price plunged below the $18 price that Bank of America may plan to use as the bench mark for its announced $2 billion investment in the largest mortgage lender in the U.S. With all the attention to the damage caused by loans to people earning $40,000 a year, but "qualifying" for $800,000 homes, the banks will be forced to do something. They will refill their swimming pools of cash if the Visa® IPO moves forward, but even that is questionable, especially as they prepare to identify the risk factors to their planned IPO in early 2008.
According to Reuters, the Mortgage Bankers Association announced that "the rate of home loans in foreclosure rose to a record high in the second quarter of 2007 as more homeowners in California, Florida and other states could not refinance their adjustable-rate mortgages."
[Commentary: WayTooHigh.com]
