Benefits of mortgage meltdown to bankcard industry

Implications: To prevent the mortgage meltdown from spreading to payment cards, Congress will suspend aggressive reforms against bankcard lenders and other government pressure (from the feds and perhaps the DoJ) will help to minimize their risks in the interchange antitrust lawsuits.  Thus what Paulson suggests must be taken away on the mortgage side will be covered on the bankcard side.

Analysis: History will repeat itself.  During the S&L meltdown 2 decades ago, the card industry was also under seige in Congress, lawsuits and by the feds.  It persuasively argued then -- and will again today -- that the profitability and viability of cards had to be protected to prevent the S&L crisis from spreading to the retail sector and prompting a full blown recession.  The card industry is probably already lobbying the exact same arguments in Washington and will use them to win allies in the retail sector, who in turn will pressure their lawyers to swallow a weak settlement of the interchange price fixing lawsuits.  They will do the same in Europe to block regulatory enforcements.  Bottom line: the mortgage meltdown could be a godsend for the bankcard industry.