WSJ: Retailers, Credit Card Issuers to Battle in US District Court

Jathon Sapsford and Mitchell Pacelle report on the upcoming trial in the retailers vs. the credit card associations lawsuit.

While victory for the retailers is by no means assured — and any judgment for the retailers could be held up for years on appeal — Wall Street analysts already are beginning to handicap the exposure of the banking industry.

“The key issues for banks revolve around their potential exposure to financial penalties and the extent to which lost fee revenue could impact earnings,” said John McDonald, an analyst with UBS Warburg following the case. Mr. McDonald added that the potential impact of lost fee revenues could cut earnings at the top card-issuing banks — including Bank of America Corp., Wells Fargo & Co. and Wachovia Inc. — by 1% to 2%.

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