Merchants Urge Congress to Oppose Interchange Settlement
Sept. 24, 2012
Merchant groups continue to lobby aggressively against the proposed $7.25 billion settlement of a class action antitrust suit brought against Visa, MasterCard and many of the top credit-card-issuing banks in regard to the way they set interchange rates. Late last week, nine groups representing a range of large and small retailers sent a letter to House and Senate leadership in Washington, D.C. outlining their opposition to the settlement negotiated over the better part of a decade by attorneys in the case.
The letter seeks to link the current credit-card interchange settlement—which essentially offers merchants cash and the ability to surcharge for credit-card purchases in return for dropping all future legal action against the card networks and issuing banks—with the work Congress did limiting debit interchange during the fight to pass the Durbin Amendment.
“While recent reforms passed by Congress have resulted in some positive changes in the marketplace, the fact is competition and transparency remain absent from the credit card payment market,” the merchant groups wrote in the letter. “The proposed settlement, which was negotiated by Visa, MasterCard and lawyers purporting to represent the merchant community, is one-sided and preserves the very anticompetitive actions that were the genesis of the lawsuits. Quite simply, the proposed settlement is a bad deal for merchants and their customers.”
While the settlement proposal is wending its way through the courts, merchant groups are seeking to short circuit the normal procedure by getting enough merchants to object to the proposal that a judge will refuse to grant preliminary approval—an unusual legal tactic.
Merchant groups that signed on to the letter, which was sent last week to Senate Majority Leader Harry Reid (D-Nev.), Senate Minority Leader Mitch McConnell (R-Ky.), House Speaker John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.), include: National Association of College Stores, the National Association of Convenience Stores, the National Association of Truck Stop Operators, the National Community Pharmacists Association, the National Cooperative Grocers Association, the National Grocers Association, the National Retail Federation, the Retail Industry Leaders Association and the Society of Independent Gasoline Marketers of America.