Visa is now draining a whopping $7 billion from customers in transactions fee, which has led to an investigation from the Justice Dept.
The U.S. Department of Justice (DOJ) has initiated a lawsuit against Visa, claiming the company has unlawfully maintained a monopoly that suppresses smaller competitors in the payments market.
In a press release, the DOJ announced its civil antitrust action, accusing Visa of unfairly dominating the debit network sector.
Antitrust laws are designed to protect consumers by curbing anti-competitive practices of dominant firms.
The DOJ argues that Visa’s monopoly is stifling competition and hindering the development of new technologies in the payments space.
It claims that Visa’s ability to shield itself from rivals has led to the company processing over 60% of debit card transactions in the United States, allowing it to collect more than $7 billion in fees annually.
According to the complaint, the fees imposed by Visa are ultimately passed on to consumers through higher prices or reduced service quality.
This means that Visa’s alleged illegal practices impact not just specific products, but the overall cost of goods and services.
The Justice Department further contends that Visa’s anti-competitive behavior has resulted in significant financial burdens for consumers, merchants, and the economy at large.
The lawsuit aims to restore competition in this critical market for the benefit of the American public.
Visa’s general counsel, Julie Rottenberg, has stated that the lawsuit lacks merit and that the company will defend itself vigorously in court.
She emphasized that businesses and consumers choose Visa for its secure and reliable network, exceptional fraud protection, and the overall value it provides.
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Also Read: TD Bank CEO Is Now Retiring Following Money Laundering Investigation
Other US Bank News Today
US banks now hold 7x more unrealized losses than during the 2008 financial crisis, according to fresh data from the FDIC.
The FDIC reported that unrealized losses on securities totaled a whopping $516.5 billion, which was an increase of $38.9 billion from the previous quarter.
This increase was largely due to higher losses on residential mortgage-backed securities, which were affected by rising mortgage rates, per the report.
FDIC-insured institutions reported a net loss of $32.1 billion in the fourth quarter of 2008 ($12.1 billion during the 1st) — demonstrating just how overleveraged institutions have gotten today.
The banking industry also reported total assets of $24.0 trillion in the first quarter 2024, an increase of $291.2 billion (1.2 percent) from fourth quarter 2023.
The quarterly increase was mainly due to higher balances in trading accounts (up $176.1 billion, or 23.2 percent), cash and balances due from depository institutions (up $79.0 billion, or 2.8 percent), and securities (up $39.9 billion, or 0.7 percent).
Alarmingly, the number of banks on the FDIC’s “Problem Bank List” increased from 52 to 63.
Total assets held by problem banks also rose $15.8 billion to $82.1 billion.
Problem banks represent 1.4 percent of total banks, which is within the normal range for non-crisis periods of 1 to 2 percent of all banks, per the FDIC.
However, the growing number of problem banks and unrealized losses points towards a shaky financial system.
In 2008, the economic consequences forced people to foreclose their homes, jobs were lost, and retirement savings were completely wiped out.
The social implications the collapse created put families on the street and triggered severe community strain.
The crisis affected economies worldwide, leading to global slowdowns and increased economic inequality in many regions.
Industry experts such as Robert Kiyosaki and Grant Cardone have warned that the people are going to experience a system crash unlike anything ever seen before.
But I’m curious to know what you think — leave your thoughts below.
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Also Read: Wells Fargo Is Now Accused of Overcharging Customers in Lawsuit
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