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ARLINGTON, Va. -- As a proposed settlement to a class-action suit aimed at swipe fees charged by major credit companies and financial institutions winds through the court system, more retailers are raising their voices in opposition of the deal.
The Retail Industry Leaders Association (RILA) said today it is opting out of the deal currently on the table. The settlement, pegged at more than $7 billion, is pending before the U.S. District Court, Eastern District of New York.
"RILA and the overwhelming majority of our members agree that the proposed class-action settlement is a bad deal for retailers," said Deborah White, executive vice president and general counsel for RILA. "The proposed settlement undermines merchants' legal rights forever and fails to restrain the continued growth of swipe fee increases."
By opting out of the settlement, RILA registers its opposition to the terms and also rejects the financial reward available to it under the terms of the proposed settlement. Arlington, Va.-based RILA represents more than 200 retailers, product manufacturers and service suppliers.
Specifically, RILA believes the proposed settlement is unacceptable because it locks in the Visa/MasterCard duopoly; provides no relief from interchange rate setting or other rules; denies all current and future retailers their right to bring future legal action related to interchange rules and rate setting -- among other things -- against Visa, MasterCard and the banks; and could limit emerging innovations that can bring meaningful competition to the marketplace, such as mobile payments.
Approximately 8 million merchants have until May 28 to opt out or object to the deal before a Sept. 12 hearing in federal district court.
This is the not the first time the association has expressed its opposition to the settlement, which was announced in July. In November, RILA joined a majority of named class plaintiffs and nearly 1,200 others in urging the court to deny preliminary approval of the proposed deal. But despite the objections, U.S. District Court Judge John Gleeson gave the deal preliminary approval.
The decision was immediately challenged by NACS, the Association for Convenience & Fuel Retailing, and other plaintiffs in the 2005 lawsuit, as CSNews Online previously reported.