The Atlanta Journal-Constitution
Card fee increases postponed
Companies delay hikes to merchants for online sales until April 2022.
Visa Inc. is postponing plans to boost the fees U. S. merchants pay when consumers use credit cards online, pushing back the changes another year to April 2022 because of the pandemic.
“Visa i s committed to maintaining stability in our payments system and will not make any future rate changes in the U. S. for another year while the economy recovers,” the company said in a statement.
Rival Mastercard Inc. said Tuesday it’s postponing plans for fee changes until April 2022 as well, vowing that it would “continue to be thoughtful” about the timing of implementing the changes.
The c ompanies’ pl a ns had drawn attention from Sen. Richard Durbin, D- I l l . , who previously helped limit fees on debit- card transactions. “We urge you to call off these planned fee increases,” Durbin wrote in a letter this month to the card networks’ chief executive officers. “Our nation is still reeling from the ongoing pandemic.”
When Visa first unveiled the changes, it said the interchange rate for so- called card- not- present transactions, which include those made online or over the phone, would rise. For a traditional Visa card, the fee on a $ 100 transaction would climb to $ 1.99 from $ 1.90. For premium Visa cards, the fee would increase to $ 2.60 from $ 2.50.
The changes — originally slated to take effect last April — were
legal fights among the company, its owners and more than two dozen states that snubbed the Sackler family members’ original $ 3 billion cash offer. Bloomberg News reported in January that state attorneys general were seeking as much as $ 7 billion from family members involved with the company.
“Today mark san important step toward pr oviding help to those who suffer from addiction, and we hope this proposed resolution will signal the beginning of a far- reaching effort to deliver assistance where it is needed,” members of the Mortimer Sackler and Raymond Sackler families said in a statement.
Since filing for bankruptcy in 2019, Purdue has pleaded guilty to three felonies and agreed to pay $ 8.3 billion to settle federal probes of how it marketed Oxycontin, a highly addictive painkiller. Members of the Sackler family last year agreed to pay $ 225 million to resolve government probes regarding their conduct in relation to Purdue’ s marketing efforts. The family members deny any wrongdoing.
Purdue officials argue the Sacklers’ total contribution to the bankruptcy plan — which doubles as a settlement for the company’s and family’s opioid liabilities — is $ 4.5 billion after the $ 225 million payment to the federal government is added to the more than $ 4.2 billion cash contribution.
Purdue’s settlement plan requires bankruptcy court approval. Judge Robert Drain has signaled a desire to resolve the suits. “The parties have a tremendous opportunity to end these cases and get the money out and abate the opioid crisis,” Drain said in a September hearing. “They should do it.”
Twenty- four states and a number of cities and counties who’ve sued to recoup billions of tax dollars spent dealing with the fallout from the opioid epidemic said the plan doesn’t do enough to hold the Sacklers accountable for their role in the public health crisis.
While the plan “contains improvements over the proposal Purdue announced and we rejected in September 2019, it falls short of the accountability that families and survivors deserve,” the dissenting attorneys general said in a joint release. “Now, the Sacklers and Purdue need to own up to their decades of misconduct and their role in creating this crisis,” the state officials added. The dissenting states include California, New York, Pennsylvania and Delaware.
Purdue and its owners have been targeted by state and local governments over their aggressive marketing of the drugmaker’s opioid- based Oxycontin painkiller. They’ve been accused of illegally pushing doctors to widen the use of the painkiller beyond government limits to generate billions in sales.
“The Sack le rs became billion aires by causing a national tragedy. Now they’re trying to get away with it,” Massachusetts Attorney General Maura Healey said in a statement. She vowed to keep pushing the drugmaker to improve its settlement plan.
Joe Rice, a South Carolina- based lawyer representing cities and counties suing Purdue and other opioid makers, called the Chapter 11 plan “a step on the ladder of progress,” but warned there are still issues to be negotiated to win the municipalities’ support.
The plan calls for transferring almost all of Purdue’s assets to a newly formed company, which would generate money governments can use to bolster drug treatment and policing budgets. That entity will be in directly owned by trusts for the benefit of governments and Native American tribes, court papers show.
Other trusts will be created to handle fund disbursements for hospitals, personal injury plaintiff sand families of opioid- addicted babies, according to court filings. The plan calls for, among other things, paying $4 billion to the trust established for the benefit of states and local governments, at least $ 700 million to personal injury plaintiffs and $ 250 million to hospitals that claim Purdue owes them money.
Some states object to the idea that once Purdue is handed over, it will continue to operate to generate revenue governments can use to combat the opioid epidemic. They’d prefer the company be sold rather than stay on the market. Purdue officials counter that continued operation maximizes the value for all creditors.
“A business that killed thousands of Americans should not be associated with government,” the attorneys general of California, New York, Idaho and other states said in a letter to thenU. S. Attorney General William Barr in October.