Detroit’s good news and comments on the bank lawsuit - Trade Only Today

Detroit’s good news and comments on the bank lawsuit

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Kudos to the Michigan Boating Industries Association on the good news about their successful Detroit Boat Show. I can’t help thinking: If there’s any place I want to see an encouraging sign coming from, it’s Detroit. After all, that area took an enormous hit when the Great Recession unfolded. To see the boat show there experience some growth again is a positive sign for all of the marine industry.

According to John Ropp, MBIA president, nearly 63,000 visitors attended the nine-day event in the Cobo Center, an increase of 1.2 percent. But the increase didn’t stop there. In total, exhibitors increased their display space at Cobo by 25 percent over last year, clearly signaling their bullish outlook for boat sales.

And, they weren’t disappointed, says Ropp. “We had a number of exhibitors who had their best show in over four years. All commented that the right people were attending the show – and that interest and sales were strong,” he added. As a result, MBIA is already looking into adding an additional exhibit hall to the show’s footprint for 2013.

About the lawsuit against the banks: You have me convinced. My concern that the class-action lawsuit against the banks might not be good for small businesses was clearly misplaced (click here to read the Feb. 23 Dealer Outlook.)

I’m referring to the suit filed on behalf of 5 million retailers against Visa, MasterCard, and 13 big banks over the 2 percent “interchange” fees they charge retailers on credit card transactions. I said in that blog that I had mixed feelings about whether the banks provided a service that justified these fees. I asked for your input.

Thanks to all those who commented, I’m now persuaded this lawsuit is a good one for retailers and, hopefully, will result in significantly reducing the interchange rates being charged retailers by the banks. Notably, all the comments were an education and all are in favor of the lawsuit. I was particularly swayed by comments from Jim Glus, Steve Baum and JMC. They clearly framed the issue of the bank fees and the impact on retailers. Moreover, JMC even moved away from the credit cards in a bold move that apparently has been successful for him. All the comments are worth reading so if you missed that blog, it’s worth going back to it.

The case is slated to be heard this September which, I gather from all of you, won’t be a day too soon. Moreover, it will be heard in the U.S. Eastern District Court with Judge John Gleeson on the bench. Interestingly, it is Judge Gleeson that heard another class action suit by Wal-Mart in 1996 and he ruled against Visa and MasterCard. It resulted in an antitrust settlement of $3 billion in damages and changes in business practices costing an estimated $25 billion more.

Let me be clear: I’m not suggesting Judge Gleeson is likely to rule against Visa, Mastercard and the banks in this case. I’m only pointing out that this judge has solid firsthand experience in dealing with lawsuits of this nature, and retailers should be happy about that. We’ll watch for the proceedings to start next fall.

In the meanwhile, thanks to all for taking time to comment on this – you set the record straight for me and probably others.

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