Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive

News Now

Washington
Retail Group Appeals $5.7B N.Y. Interchange Settlement
NEW YORK, N.Y. (1/6/14)--The National Retail Federation last week appealed a $5.7 billion class action interchange suit settlement, asking the 2nd U.S. Circuit Court of Appeals to overturn a ruling made by U.S. District Judge John Gleeson in the Eastern District of New York, Brooklyn.

The class action settlement, which would be the largest private antitrust damages recovery in U.S. history, was approved in December. The settlement follows a 2008 suit in which merchants alleged MasterCard and Visa set artificially high credit card interchange fees.

NRF Senior Vice President and General Counsel Mallory Duncan in a release said the settlement "is an abuse of the class action system and should never have been approved." She noted that most of the original plaintiffs in the case "repudiated the settlement as soon as they saw its terms."

Some merchants have indicated they will opt out of the approved settlement.

The settlement requires a reduced interchange rate fee of 10 basis points for an eight-month period, and also calls for Visa, MasterCard and the banks to create a fund to repay retailers for past fees charged. Retailers would also be permitted to assess "check out" fees or surcharges on credit card purchases, which has previously been prohibited by Visa and Mastercard rules, under the terms of the settlement.

In a separate ongoing interchange case, NACS, et al. v. Board of Governors of the Federal Reserve System, the Credit Union National Association and its partner members of The Clearing House coalition will be in court Jan. 17 to present 10 minutes of oral arguments. In this case, a merchants' coalition has challenged the Fed's implementation of a Dodd-Frank Act-imposed debit interchange cap as too high. CUNA and its partner maintain that the cap, in fact, is too restrictive.

CUNA and it financial services partners have argued that the Fed cap does not factor in enough of the costs that card issuers face for providing their services. (See Dec. 30 News Now story: CUNA, Coalition Partners Added to Jan. 17 Interchange Oral Arguments.)


RSS print
News Now LiveWire
NCUA re-schedules start of tomorrow's closed meeting to 9 a.m. ET. Open meeting still at 10 a.m. ET.
5 hours ago
.@lisamurkowski @SenatorEnzi @SenJohnBarrasso are latest to weigh in on NCUA risk-based capital proposal. See #NewsNow tomorrow for more
6 hours ago
Now up on News Now: Fed stays course on taper, interest rates http://t.co/6DntsW58vA
8 hours ago
Positive performance indicators and the potential for rising interest rates in @TheNCUA 's latest economic update. http://t.co/yptPbIGvnU
11 hours ago
The @CFPB has launched a nationwide effort to provide financial education. http://t.co/sF3FXHpv3k
11 hours ago