Durbin Weighs in on Swipe Fee Settlement - Legal News

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » News » Legal » Durbin Weighs in on Swipe Fee Settlement

Durbin Weighs in on Swipe Fee Settlement

When Visa and MasterCard offered a $7.25 billion settlement package to retailers in their seven-year-long battle over interchange fees – also known as swipe fees – it was heralded as the largest-ever settlement in an antitrust case.

However, it looks like the settlement is unlikely to actually happen, as more and more retailers come out against the settlement, saying it doesn’t go far enough and will not actually fix anything going forward. Now Bloomberg News reports that Senator Richard Durbin, who got the Durbin Amendment put into the 2010 Dodd-Frank Act, limiting interchange fees on debit cards, has put in his two cents regarding the settlement.

Through his office, Durbin made it known that retailers who accept the settlement would put the final nail in the coffin for “the prospect of good legislation.” Durbin’s senior judiciary counsel, Dan Swanson, said that if the settlement is approved, “it will essentially be game over.”

Permanent Legal Immunity

Earlier this month, Durbin said that the settlement does nothing to change the anticompetitive fee-fixing that Visa and MasterCard do on behalf of their member banks. In fact, it gives Visa and MasterCard broad and permanent legal immunity to continue doing exactly that in the future.”

If retailers hope for Congress to enact legislation on their behalf, limiting interchange fees on credit cards the way they did on debit, they will need support from people like Senator Durbin, the Democratic majority whip from Illinois.

MasterCard and Visa obviously don’t want such legislation enacted, and would vastly prefer to have the case handled in the courts rather than the floor of Congress. “The legal system was and is the appropriate system to resolve a large and complex dispute between companies, not Washington,” said Trish Wexler, spokesperson for the Electronic Payments Coalition, which represents Visa and MasterCard.

The settlement offer was their attempt to put the case behind them, and if retailers’ acceptance of the offer causes Congress to stay away from creating new legislation around swipe fees, it could be a win-win situation for the credit card issuers.

Retailers Bite Back

In the wake of Durbin’s comments about the settlement, the National Retail Federation came out to say thanks, but no thanks, to interference from the Senator. Mallory Duncan, general counsel for the retail trade group, which includes retail giants Macy’s and Gap Inc. says that “Senator Durbin doesn’t have to gin up opposition to this settlement.” In an interview with Bloomberg News, Duncan said that an “overwhelming majority” of their members do not support the settlement.

Among those opposing the settlement is Wal-Mart, who told merchants that the settlement would tie their hands if they want to take further legal action against Visa and MasterCard and urged other merchants to say no to the settlement. Wal-Mart’s trade group, the Food Marketing Institute, which also included Target and Sears, did not take a position on the settlement, preferring to let their members speak for themselves. Target also said they do not support the settlement, as did the National Association of Convenience Stores, the National Community Pharmacists Association, and the National Grocers Association

Another No Vote

The latest retail group to oppose the settlement is the Cumberland Gulf Group, who said on Monday via a press release that their group “urges everyone in the merchant community, including those representing the class of merchants around the nation, to support a real solution to the problem caused by the card companies’ anticompetitive conduct.” Their “empathic opposition to the proposed settlement” is due to their belief that the settlement will not effect long-term change and will prevent further legal action against credit card issuers.

Ari Haseotes, CEO of Cumberland Farms, Inc. says that “The proposal offers no long-term relief for retailers or consumers from increasing swipe fees or from unfair credit card network rules. Moreover, this will not keep the card networks from continuing to raise swipe fees, which already cost retailers and consumers approximately $50 billion every year.”

Showdown in Brooklyn

The settlement is expected to be approved or rejected by U.S. District Judge John Gleeson in Brooklyn, New York, sometime this fall. Credit-Land will continue to keep readers up-to-date on the antitrust case as new developments occur.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:

Related News:

No Early Appeal in Visa/MasterCard Suit Settlement
No Early Appeal in Visa/MasterCard Suit Settlement

Posted: December 12, 2012

A bid for an early appeal of the preliminary approval of Visa and MasterCard’s settlement offer in an antitrust suit was turned down this week. Continue reading
Navy Federal Credit Union Upgrades the Go Rewards Credit Card

Posted: December 15, 2017

People with the Navy Federal Credit Union GO REWARDS MasterCard credit card now get more benefits with their card, including free two-day shipping and discounts when booking high-end rental homes. People can access the free shipping via ... Continue reading
New Credit Card Agreements for Marriott

Posted: December 14, 2017

Marriott International has inked new deals with JPMorgan Chase and American Express to extend the hoteliers relationship with both companies. With this deal, the Marriott Rewards and Ritz-Carlton Rewards Visa credit cards will continue to ... Continue reading
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.
We'll match all the Miles you've earned at the end of your first year. For example, if you earn 30,000 Miles, you get 60,000 Miles.
For Excellent, Good Credit
Earn 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com, or wholesale clubs up to the quarterly maximum each time you activate.
For Excellent, Good Credit
Our application is quick and easy with instant pre-qualification available
For Fair / Good Credit