Ruling Stalls Bid by Sears to Launch Visa Card
Sears, Roebuck & Co. has suffered a setback in its efforts to launch a Visa card after a Denver federal appeals court judge blocked its plans to solicit customers through a thrift.
Sears planned to mail information in March about the cards to about 6.5 million consumers before Visa lodged an appeal.
Visa said it would be unfair for Sears to muscle in on its territory since the retailer already issues its own Discover card. “We think it’s a wise decision,” Visa spokesman said.
The Denver ruling, made Tuesday, overturned a preliminary injunction Sears won earlier this year against Visa conditions that exclude Sears affiliates from becoming Visa members.
A federal district court judge in Salt Lake City ruled in February that San Mateo, Calif.-based Visa could not bar Sears from issuing Visa cards.
But the appeals court said the district court judge’s decision did not meet qualifications needed for an injunction.
Sears bought MountainWest Financial, the successor to MountainWest Savings & Loan Assn., from the Resolution Trust Corp. in May, 1990, and it sued Visa to allow Sears to issue Prime Option Visa cards through the Utah thrift.
Sears officials said the appeals court decision made no comments on the merits of its case.
“This is only a temporary setback for the credit-card carrying consumer,” said Philip Purcell, chairman of Dean Witter Financial Services Group, Sears’ financial subsidiary.
A spokeswoman said Dean Witter is considering “all legal aspects” regarding the case.
Visa officials said Sears’ bid would reduce competition in the concentrated credit card business, particularly between Visa and the Sears Discover card.
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