Albuquerque, NM – Attorney General Hector Balderas announced today that he reached a settlement with Visa and MasterCard, the United States' two largest payment card networks, over a lawsuit brought by the New Mexico Office of the Attorney General alleging excessive fees charged during credit and debit card transactions.

"We negotiated an agreement that will compensate the harm to New Mexico's economy, enforce our strong consumer protection statutes, and deter companies that seek to exploit our citizens and violate our consumer protection laws," said Attorney General Hector Balderas. "I'm committed to protecting New Mexico consumers, but education is also key and that's why our office will be hosting free financial literacy trainings regarding credit and debit card 'fine print' in Albuquerque, Española and Las Cruces."

The Office of the Attorney General filed the lawsuit in December 2014 in New Mexico state court to disgorge wrongful gains and impose penalties for alleged anticompetitive misconduct by the two companies in setting "interchange fees"—fees imposed on merchants each time a cardholder swipes a Visa or MasterCard. According to the Complaint, not only were New Mexico merchants harmed by these improper fees, but the merchants passed a portion of the cost of these fees on to their customers in the form of higher prices for goods and services, affecting New Mexico residents. Like private merchants, state agencies were also charged interchange fees by the payment card companies.

Since its filing in 2014, New Mexico's case survived attempts by the two companies to have claims dismissed. After briefing and arguments, the Court ordered that the State's following claims could proceed: unjust enrichment, restitution, disgorgement, Unfair Practices Act, and civil conspiracy to violate the Unfair Practices Act. The Court also allowed the "State's claims for damages or other remedies in its parens patriae authority under any count that [the] Order [did] not dismiss, including any claims for damages or other remedies sought to protect the State's interest in its general economy."

Prior to filing its Complaint, New Mexico had opted out of a national class action settlement that had been criticized for its lack of injunctive relief, potentially illusory compensation to merchants, and lack of due process to absent class members. That settlement was subsequently rejected by the Second Circuit Court of Appeals in June 2016 and the Supreme Court has since denied review.

The case was before Judge Sarah Singleton and Judge Raymond Ortiz of the First Judicial District in Santa Fe; Assistant Attorney General Nicholas M. Sydow led the case for the Office of the Attorney General.

Please see below for a copy of the Settlement Agreement.

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