National Retail Federation to oppose $7.25 billion interchange fee settlement

The National Retail Federation announced on Tuesday that it will try to block a $7.25 billion settlement between Visa, MasterCard and retailers over alleged interchange fee-fixing.

The NRF, which is not party to the lawsuit, said that the proposed settlement will not prevent fees from rising in the future and would eliminate the possibility of any future legal challenges. The group also said that it is unsure whether the case qualifies as class action or whether outside parties will be allowed to challenge the suit, according to the Los Angeles Times.

“The settlement was by the credit card companies and for the credit card companies,” Mallory Duncan, the senior vice president and general counsel for the NRF, said, the Los Angeles Times reports. “This will not help merchants or customers.”

The NRF joins several other retailers, including Target and Wal-Mart, in opposing the settlement.

Duncan said that the NRF would be in the best position to block the settlement, as it is the only trade group that represents various factions of the retail industry.

Visa, MasterCard and the banks agreed to settle in July following allegations by retailers that the card processors and banks colluded to fix interchange rates.

Under the proposed settlement, card processors agreed to lower interchange rates for eight months and to allow retailers to charge consumers a “checkout fee” for paying with plastic. The card companies allege that stores benefit from accepting debit and credit cards, as consumers often spend more when paying with plastic, the Los Angeles Times reports.

Duncan said the settlement will be presented in front of a judge next month, at which time the court will allow for opposition to the terms. During this period, the parties usually made adjustments to the settlement, but the NRF says its efforts will extend beyond minor changes.

“It isn’t even worth tweaking,” Duncan said, the Los Angeles Times reports. “It needs to be thrown out.”

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