John said that the regulatory issues involving the restructuring would center on the Securities and Exchange Commission and the Sarbanes Oxley Act after the restructuring and IPO.

“It may well be that they saw that their previous course of action was not working as well as they might have hoped and that MasterCard did better with its restructuring than had been expected,” John noted.

He also pointed out that Visa Inc. would have somewhat of an advantage because it will be able to start out with the new regulatory requirements in mind rather than have to change its procedures to adapt to new regulations.

Visa's announcement that it was going to become a corporation and issue stock is an abrupt 180-degree turn from the course the corporation had announced it was taking less than a year ago.

When making announcements about changing its governance structure in 2005, the card brand had explicitly stated that it would remain an association and would not follow MasterCard's move and become a public company. The announcement of the restructuring remained silent on why Visa had changed paths.

One industry analyst who tracks cards believed that Visa might have been induced to change its direction after seeing how well the MasterCard restructuring and IPO went. MasterCard issued its IPO in May 2005 and the stock, which opened at $46 per share, has closed as high as $70 per share recently.

Visa mentioned legal issues in the press release announcing the restructuring, but did not go into any details. Analysts have long pointed out that a flood of lawsuits from retailers and others have been pushing the card brand toward a course that will provide it a good deal more cash.

Within the new model, Visa Europe will retain its member-owned association structure, with continued ownership by its 4,500 European member banks, and will operate as a licensee of Visa Inc. This structure will enable Visa Europe to focus on the significant opportunities arising from the formation of an internal market for payments in Europe through the Single Euro Payments Area (SEPA). Visa Europe will be a minority stockholder in the global company, and Visa Inc. will have a minority investment interest in Visa Europe.

“Visa recognizes that the unique features of the European market require a tailored approach,” said Jan Liden, chairman of Visa Europe. “This is a European solution for Europe. It will benefit all of our stakeholders–our member banks and their customers–retailers and consumers. And it supports the European Commission's stated goal of creating European-wide payments systems.” The Credit Union Effect

As of press time no one familiar with a credit union's role in Visa was prepared to comment on what the restructuring might mean for CUs. Robert Hackney, president of Card Services for Credit Unions, the association of credit unions that process their card transactions with Fidelity National Information Systems, is a member of Visa USA's Board of Directors, but declined to comment on the restructuring until after Visa cleared more information for public consumption.

Off the record, a number of analysts pointed out that a stock-owned company that issues stock will shift some of the legal liability for Visa, should legal decisions go against the card brand, away from the members of Visa and more toward Visa Inc. itself. This should help shield both credit and community banks from the fears of any longstanding legal and financial impact from Visa.

But shielding that liability has brought at least one negative. Both Standard & Poor's Ratings Services and Moody's Investors Service have changed their ratings for Visa International after the card brand made its announcement.

S&P placed its “A” long-term and “A-1″ short-term ratings for Visa International on negative watch, while Moody's changed the outlook some of Visa's debt to negative from stable.

“It is our understanding that within the process of converting to a publicly traded for-profit company, Visa will most likely discontinue the right for special assessments of its members,” S&P's credit analyst Daniel Koelsch said in a prepared statement. “This has been a major ratings factor in our ratings on Visa.”

The ratings agency also expressed concern over how liabilities from existing litigations from Visa USA will be treated in the new entity.

“The change in outlook reflects the potential that following the restructuring, Visa International's rated debt obligations might not benefit as substantially from the implicit support of Visa International's members,” Moody's Vice President and Senior Analyst Curt Beaudouin said in a statement. –[email protected]