WASHINGTON – Sen. Richard Durbin, author of the 2010 Dodd-Frank Act rule capping debit card fees, is telling retailers the proposed $7.2-billion antitrust settlement with Visa and MasterCard is bad for them and should be rejected.
Durbin, who has been fighting to cut card fees for a decade, said retailers should “think hard” before signing on to the historic deal, which still must be approved by a federal judge.
“This is a stunning giveaway to Visa and MasterCard,” said Durbin, the Senate’s second-ranking Democrat, in remarks last week, according to the Congressional Record. “This is a bad deal, but it is not a done deal. The merchant plaintiffs still have to decide if they will support it.”
“It gives Visa and MasterCard free reign to carry on their anti-competitive swipe-fee system with no real constraints and no legal accountability,” said the Illinois Senator. “This is not a settlement I would agree to. I hope that the remaining merchant plaintiffs will review the proposed settlement carefully and think hard about whether it will be good for the future of our credit- and debit-card systems.”
The emergence of Durbin’s opposition comes as several major retail groups, including the National Cooperative Grocers Association, the National Grocers Association, the National Association of Convenience Stores and the National Community Pharmacists Association, as well as retail giants Walmart and Target, have weighed in against the antitrust deal, under which a dozen banks also will pay a total of $1.2 billion.
The settlement may be nullified if enough retailers refuse to join. Visa, MasterCard and the banks can terminate the accord if the retailers who opt out account for more than 25% of U.S. credit-card spending processed by the two networks from Jan. 1, 2004, through the month the accord is approved by the court.
Durbin pushed to include debit-card limits in the 2010 Dodd-Frank Act, and the Federal Reserve last year capped those fees at about half the average that retailers had paid previously, costing banks about $8 billion in annual revenue.