National Restaurant Association Praises Rejection of Interchange Fee Settlement
The National Restaurant Association is praising a decision from the U.S. Court of Appeals for the Second Circuit to reject a proposed settlement in the Visa, MasterCard Class Action Antitrust lawsuit (MDL 1720). In its decision, the Court stated that the plaintiffs were not adequately represented and that the settlement itself was "unreasonable and inadequate."
"The Circuit Court confirmed what we knew all along: the proposed settlement would not have achieved the litigation’s most critical goal—to fundamentally change a broken marketplace in which swipe fees are set. The settlement was so restrictive that it could have allowed these companies to dominate the payments ecosystem unchallenged at a time when new technological developments have the potential to change the competitive landscape,” says Cicely Simpson, executive vice president of Policy and Government Affairs.
The National Restaurant Association joined the swipe fee litigation in 2006 as a named class plaintiff in the suit against MasterCard, Visa, and their member banks. Negotiations over several years resulted in a proposed settlement agreement filed with the court in July 2012. The Association objected to the agreement along with a majority of plaintiffs, and it is the only named plaintiff representing the restaurant and foodservice industry perspective.
Over the past few years, the National Restaurant Association has worked to foster a fairer payments system for restaurateurs. There have been significant achievements, with increased transparency of card network rules and rates and the passage of federal legislation in 2010 that included debit swipe fee reforms. The association is actively engaged on Capitol Hill to oppose recently introduced efforts by House Financial Services Chairman Jeb Hensarling and Congressman Randy Neugebauer to repeal those hard-fought reforms.