Some financial institutions are not happy with the recently announced settlement between Target and MasterCard related to costs from the late-2013 data breach at the mass-market retailer. In a press release last week, lawyers for card-issuing FIs spoke out against the deal:

The MasterCard settlement attempts to release financial institutions' claims against Target without involvement by the financial institutions, their court-appointed counsel Zimmerman Reed and Chestnut Cambronne, or the court itself. In reality, MasterCard's settlement only appears to provide for a return of a small portion of card issuers' reissuance and fraud loss damages caused by the Target data breach. MasterCard's settlement has not been endorsed in any way by the financial institutions ... In fact, the financial institutions and their attorneys were excluded from the private negotiations that led to the Target-MasterCard settlement.

The release urged FIs not to enter into any agreement with Target or MasterCard offered outside the ongoing litigation in the U.S. District Court without first understanding the rights available in those proceedings. The court has set a hearing for April 27 to address this issue.

The release asserted that the proposed $19 million settlement "appears to represent a minimal portion of the actual damages incurred by card-issuing financial institutions," and said that Target and MasterCard have offered no substantiation that the amount offered will be sufficient to cover FIs' costs related to the breach.

"What you have is a behind-the-curtain cheap settlement that isn't anywhere near capturing what financial institutions have suffered," lead counsel Charles Zimmerman told the Minneapolis StarTribune.