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BERKELEY STUDY WARNS UNFRIENDLY LEGISLATIVE, LEGAL CLIMATE COULD COST THOUSANDS OF CALIFORNIA CREDIT CARD JOBS

 SAN FRANCISCO, May 6 /PRNewswire/ -- A study of the California credit card industry by a University of California, Berkeley professor warns that if recent court rulings are allowed to stand and restrictive interest rate caps are imposed by the Legislature "it would devastate credit card employment in California." The study was funded by Visa U.S.A. Inc.
 Berkeley Law Professor Robert D. Cooter's study of 12 leading California credit card issuers indicates the state will lose more than 4,500 jobs if the legislative and legal climate continues to deteriorate.
 Currently, California is home to more than 21,000 direct credit card jobs.
 Over the past two years, California has lost well over 1,000 credit card jobs at a time when the industry grew nationwide, according to the study. The study noted that until "some recent adverse rulings by California courts, the state had enjoyed steady job growth in the industry almost every year since 1975."
 Cooter linked the current attitude among credit card companies to "a series of court rulings that restrict late and over-limit fees" by California-based credit card issuers. In addition, he said, the California legislature is considering a bill to enact interest rate caps.
 "California may be condemned to the disastrous experience of New York when similar legislative action hostile to the credit card industry in the 1970s cost that state more than 20,000 jobs," Cooter said.
 A recent study by DRI/McGraw-Hill rating the attractiveness to the card industry of various states, ranked California 42nd of 50 states and 22nd of 24 Western states.
 "An increasingly hostile legal and regulatory environment is driving credit card issuers out of California to other states that have made conscious efforts to adapt their laws and regulations to the needs and practices of this growing, vibrant industry," Cooter said. He pointed out that neighboring states such as Colorado, Arizona and Nevada "are actively luring jobs in this industry away from California."
 Cooter suggested that "a few simple steps by the California legislature will help begin to restore California's historic position as leader of the bank credit card industry."
 According to the study, if legislation were enacted guaranteeing market-driven fees and prices, California's ranking for relative attractiveness to credit card firms would jump from 22nd to 10th among the 24 Western states. Conversely, if the California legislature votes to cap interest rates, California's attractiveness to credit card firms would fall to last among the 24 Western states.
 California credit card jobs are spread across every region in the state, with San Francisco, Los Angeles and San Diego counties accounting for roughly half of the total employment. California credit card employment grew almost every year between 1975 and 1990, but beginning in 1991 and continuing last year, the industry suffered declines.
 Visa is the largest consumer payment card system in the world with more than 10 million acceptance locations and 291 million cards issued worldwide, including 144 million in the U.S. Visa also has the leading global ATM network.
 -0- 5/6/93
 /CONTACT: Susan Murdy of Visa U.S.A., 415-570-3336/


CO: Visa USA Inc. ST: California IN: FIN SU:

TM -- SF007 -- 5447 05/06/93 12:30 EDT
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Date:May 6, 1993
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