DEPARTMENT: Finance
FILE TYPE: Consent Action
TITLE
title
Authorization To Participate In The Discover Financial Services Merchant Class Action Settlement And Submit Claims For Any Amounts Owed
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PURPOSE/ACTION REQUESTED
Authorize the Deputy County Manager to participate in the Discover Financial Services Merchant Class Action Settlement by submitting online claims for transactions processed using Discover credit cards between 2007 and 2023.
SUMMARY
Discover Financial Services processes credit card transactions (“Discover Card transactions”) on behalf of third-party intermediaries and end-user merchants. Discover Financial Services was named in a class action lawsuit in which it was accused of misclassifying “consumer” credit cards as “commercial” credit cards and charged higher merchant processing fees as a result. Dakota County as an end-user processor accepting Discover Card transactions qualifies as a claimant in the class action.
Plaintiffs and Discover Financial Services have entered into a global settlement agreement in which it has agreed to pay at minimum a total of $540 million to claimants, with the exact payment amount dependent on the number of claims submitted. Dakota County has a claim to a portion of the settlement proceeds as an end-user merchant that processes Discover Card transactions.
Dakota County has received several notices for enrollment into the settlement, with a deadline to submit claims by May 18, 2026. Risk Management and Finance will work together to compile and submit data for the claim.
RECOMMENDATION
recommendation
Staff recommend the Board authorize the Deputy County Manager to participate in Discover Financial Services Merchant Class Action Settlement and submit claims for transactions processed using Discover credit cards between 2007 and 2023.
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EXPLANATION OF FISCAL/FTE IMPACTS
Participation in the class action settlement may result in additional revenue based on claims submitted. Any revenue received because of participation in this class action lawsuit will be recorded to the General Fund.
☐ None ☒ Current budget ☐ Other
☐ Amendment Requested ☐ New FTE(s) requested
RESOLUTION
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WHEREAS, Discover Financial Services has reached a settlement to resolve allegations of misclassifying credit cards resulting in excessive merchant fees; and
WHEREAS, Dakota County accepted Discover transactions during the class period (2007-2023) and is eligible for a portion of the settlement; and
WHEREAS, the deadline for claim submission is May 18, 2026.
NOW, THEREFORE, BE IT RESOLVED, That the Dakota County Board of Commissioners hereby authorizes participation in the Discover Card Merchant Class Action Settlement; and
BE IT FURTHER RESOLVED, That the Deputy County Manager is authorized to execute and submit all necessary claim documents prior to the deadline; and
BE IT FURTHER RESOLVED, That any proceeds received be deposited into the appropriate County funds as determined by the Deputy County Manager.
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PREVIOUS BOARD ACTION
None.
ATTACHMENTS
Attachment: None.
BOARD GOALS
☐ Thriving People ☐ A Healthy Environment with Quality Natural Resources
☐ A Successful Place for Business and Jobs ☒ Excellence in Public Service
CONTACT
Department Head: Will Wallo
Author: Kristen Zimmerman