A group of First Farmers & Merchants banks in southern Minnesota has sued Target Corp. over alleged damages from the retailer's data breach late last year.
While a number of financial institutions from around the country have sued the company since news of the data heist broke, the First Farmer & Merchants lawsuit is believed to be the first by a financial institution on Target's home turf in Minnesota.
"The way that this has happened, it's the banks whose exposure is greatest here, " said Garrett Blanchfield, a lawyer at Reinhardt Wendorf & Blanchfield in St. Paul representing the local banks. "We think the Minnesota laws provide a sound basis for us."
The complaint doesn't specify a damage amount but says the banks have had to refund fraudulent charges, close and reopen checking and savings accounts and cancel and re-issue credit and debit cards.
As of February, banks and credit unions nationally estimated they've spent more than $200 million replacing credit and debit cards whose data were snatched in the attack on the retailer's computer system.
The banks are First Farmers & Merchants National Bank in Luverne, First Farmers & Merchants National Bank in Fairmont, First Farmers & Merchants State Bank in Brownsdale, First Farmers & Merchants State Bank of Grand Meadow and First Farmers & Merchants Bank in Cannon Falls.
The sister banks, which make a lot of agricultural loans, together have assets of about $657 million, and employ about 166 people, government filings show. They are subsidiaries of Minneapolis-based 215 Holding Co. The group of banks declined to comment on the lawsuit.
Suit could test 2007 law
The suit, filed Saturday in U.S. District Court in Minnesota, could be the first test of Minnesota's "Plastic Card Security Act," some attorneys say. The 2007 law requires a merchant that improperly holds payment card data and doesn't adequately protect it to reimburse financial institutions for any losses from a breach.
