Card issuer shares decline as new regulation looms

By Joe Rauch

CHARLOTTE, North Carolina (BestGrowthStock) – Shares of four major U.S. credit card issuers fell amid a broad industry selloff on Friday after a U.S. Senate vote to limit credit and debit card fees.

Shares of Visa Inc (V.N: ) dropped 8.5 percent to $78.40, while MasterCard Inc (MA.N: ) fell 7.5 percent to $214.86.

American Express Co (AXP.N: ) shares declined 3.5 percent to $41.31, and Capital One Financial Corp (COF.N: ) dropped 5.3 percent to $42.53.

Visa and MasterCard posted the two largest percentage declines on the New York Stock Exchange.

American Express shares posted the largest percentage decline among Dow Jones industrial average components, while Capital One shares had the biggest decline among KBW Bank Index companies.

The proposal to limit credit and debit card fees was offered as an amendment to the financial reform bill in the Senate. It limits interchange fees on debit transactions and allows merchants more freedom in setting guidelines for card use by customers.

“We expect investors to shoot first and ask questions later as they wrestle with the financial impact of this development,” FBR Capital Markets analyst Scott Valentin said in a note to clients.

He said the unexpected passage of the amendment probably means card issuers will eliminate many debit-card transaction rewards and few merchant cost-savings will be passed on to the consumer.

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(Reporting by Joe Rauch; Editing by Lisa Von Ahn and John Wallace)

Card issuer shares decline as new regulation looms