For those of you who read our last article concerning debit rewards stay tuned to MyBankTracker.com for a new list each week. The lists will highlight the actions banks plan to take with either debit rewards, checking and other retail banking services.
These changes are as a result of new rules taking effect this fall that will reduce the amount of interchange fees large banks can charge merchants that accept debit cards as a method of payment. If you’re not familiar with the interchange fee rule, it was introduced by Sen. Dick Durbin and included in the Dodd Frank Act that became law last year. While the rule has gone through some revisions, the final version of the rule will cap the amount of interchange fees banks with assets of $10 billion or more can charge merchants.
Specifically, the Federal Reserve decided to cap interchange fees at 21 cents per debit card transaction, down from an original 44 cents. The rule is now poised to take effect on Oct. 1, nine weeks later than originally expected. Banks like Chase, Wells Fargo and USAA have already done away with their debit rewards, free checking and other programs as a result of the plan taking effect because these programs typically funded by the interchange fees that these such banks collect.
The 12 cent limit was expected to lead to an annual loss of between $14 billion to $16 billion for the banks the rule applies to.
Read more: Fed Raises Debit Swipe Fee Cap to 21 Cents
Here’s a list of some more national banks and their plans for either their debit rewards programs, free checking programs and other retail services, where applicable:
- TCF National: According to a representative for the bank, TCF National ended its free checking program back in the second quarter of 2010 and replaced it with no balance checking. The banks is still reviewing what the final impact of the new rule will be on its debit rewards program.
- First Financial Bank of Texas: A representative said that the bank doesn’t currently have a debit rewards program but wouldn’t immediately be impacted by the amendment
- Frost National Bank of Texas: A representative also told MyBankTracker.com that the bank didn’t have debit rewards program and didn’t know what the ultimate impact of the program would be
- Sovereign Bank: MyBankTracker.com was told that this bank has no plans to end its own debit rewards program at this point
- Sterling Savings Bank: A representative for the company informed MyBankTracker.com that the bank was still looking into the competition and reviewing what the impact of the amendment would be on its services, but still had no plans to make any changes.
Continue to keep track of how the Durbin Amendment will affect some of the nation’s other large banks each Saturday with MyBankTracker.com.