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Electronic Payments Coalition |

Electronic Payments Coalition Issues Statement on National Retail Federation Interchange Settlement Appeal

After nearly a decade of negotiations, the court has determined that this settlement is in the best interest of all parties involved.  This is simply a political ploy by a few big box retailers – for whom enough is never enough – that disregards the millions of retailers who are supportive of the settlement.  These same tired arguments were raised over and over during the negotiations and would have been included in the final terms if they had any merit.
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Electronic Payments Coalition Issues Statement on Approval of Interchange Fee Settlement

Today, the U.S. District Court for the Eastern District of New York approved a settlement in the long-running legal dispute between retailers, payment networks and nine major card issuers over interchange fees and rules. The Electronic Payments Coalition issued the following statement:  “The long political conflict over interchange fees is finally over, settled by a well-established legal process, which brought together retailers and the card industry for a negotiated resolution. After years of mediation, dozens of meetings, and millions of pages of evidence, the parties involved have willingly agreed to settle their dispute.  “This settlement is in the best interest of all involved parties and that has been proven today with the court’s final approval.”
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Consumers Lose Under the Durbin Amendment

University of Chicago Law School Analysis Finds Consumers Will Lose $22 Billion as a Result of the Durbin amendment Nearly three years after the implementation of the Durbin amendment, consumers have yet to see the savings that retailers promised. Instead, they are paying the same or higher prices for goods and services and more in consumer banking costs. An analysis by University of Chicago Law School economists David S. Evans, Howard Chang, and Steven Joyce entitled “The Impact of the U.S. Debit Card Interchange Fee Regulation on Consumer Welfare: An Event Study Analysis” quantifies just how much consumers are expected to lose, rather than gain, from The Durbin amendment. The paper analyzes stock prices to determine the impact to consumers from the Durbin Amendment. The analysis finds that retailers gained a $7 billion yearly windfall starting in 2011 as a result of the Durbin amendment. At the same time, consumers began losing many money-saving banking benefits as a result of the Durbin amendment. These changes set off a series of consequences that ultimately will cause consumers to lose more than $22 billion.
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Federal Reserve Bank of Richmond: Debit Card Interchange Fee Regulation

The Federal Reserve Bank of Richmond published the report “Debit Card Interchange Fee Regulation:  Some Assessments and Considerations” in the third quarter 2012 issue of Economic Quarterly. The report analyzes the debit card interchange fee regulation introduced by the Durbin amendment and its first-year impact on different players in the debit card market. The report specifically notes the unintended consequences of the Durbin amendment on small-ticket sales and rising bank fees.
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BankRate.com |

Bankrate: 2013 Credit Union Checking Survey

The survey found that 72 percent of credit union checking accounts remain free and 39 percent of bank checking accounts remain free. The article notes that one reason for the difference may be that most credit unions aren’t subject to the Durbin amendment, which has resulted in a loss of revenue for many institutions. The author explains that checking account fees have been used as a way to make up for those revenue losses.
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Preliminary Approval Granted in Interchange Settlement

The Honorable Judge John Gleeson of the U.S. District Court for the Eastern District of New York granted preliminary approval of the landmark settlement agreement between retailers, payment networks and nine major card issuers, over merchant interchange fees.  The settlement was originally announced on July 13th after several years of litigation. The preliminary approval of this historic settlement will almost immediately give retailers the many benefits they demanded.  Sixty days from November 9, 2012, the card networks will implement rule changes.  Merchants will now have the ability to add checkout fees (a retailer surcharge) at the register and form buying groups.
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Another Step Closer to Final Approval of the Interchange Settlement

Class counsel, on behalf of numerous retailers who are proposed class representatives, filed the Definitive Settlement Agreement, as well as a motion to request that the Honorable Judge Gleeson of the U.S. District Court for the Eastern District of New York preliminarily approve a landmark settlement of a lawsuit over merchant interchange fees.  The settlement was originally announced on July 13th after over seven years of litigation, mediation and negotiation between retailers, payment networks and nine major card issuers.  The parties involved have now come together to take the next step in the process in an effort to settle this dispute once and for all.
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Six Questions Surrounding the Interchange Settlement

Members of the Electronic Payments Coalition remain highly confident that the Court will grant preliminary, and ultimately final, approval for the settlement in the merchant class action suit against the payment card industry – and that this represents the end of a long battle and finally puts all the issues raised to rest going forward.  Recent noise in the press, however, has raised a number of questions as to why we remain so confident in this outcome.  This is an interview with Robert Stolebarger, partner at Bryan Cave LLP and antitrust counsel for the Electronic Payments Coalition, where he addresses some of the most commonly asked questions.
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