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The National Cooperative Grocers Association (NCGA) has joined the chorus of industry players that have rejected the recently proposed $7.25 billion class action settlement with Visa, MasterCard and several major banks. Iowa City, Iowa-based NCGA, a business services cooperative for retail food co-ops throughout the United States, is named as one of the plaintiffs in the antitrust lawsuit.
“When NCGA signed onto this action, we did so in the interest of consumer fairness and in support of industry transparency,” explained Robynn Shrader, the organization’s CEO. “This settlement falls short of providing true reform in the system by continuing to allow credit card issuers and credit card networks to exploit retailers and consumers without risk of repercussion.”
The proposed settlement would enable individual retailers to charge fees directly to consumers who use credit cards or debit cards, a scenario NCGA opposes as a way to shift the burden to retailers of collecting noncompetitive fees from consumers. The practice of surcharging is an inadequate solution to the broader problem of swipe fees, according to the association, which adds that the settlement doesn’t prevent credit card issuers and credit card networks from raising related fees in the future, and if accepted, would shield credit issuers from future lawsuits.
NCGA urged other retailers to reject the proposed settlement, as the National Grocers Association, Walmart and Target already have, and demand a revised offer that would hold credit card issuers accountable, ensure competition in the market and encourage payment system innovation.