As we’ve covered in the past, debit rewards programs have disappeared across the country in anticipation of the Durbin rule, which will officially kick in this October.
In its current form, the rule will slash the amount of interchange fees some of the nation’s largest banks can charge merchants that accept debit cards from 44 cents to just 21 cents per transaction. In anticipation of the rule officially kicking in on October 1, banks across the nation not exempt from the rule have begun to end retail banking programs such as debit rewards programs and free checking.
Banks like Chase and Wells Fargo, which have both ended such programs, justified their actions by saying that interchange fees large banks collect directly fund debit rewards and free checking programs. When one considers that debit card use in the United States exceeds all other forms of noncash payments and actually accounts for more than a third of such payments, it’s easy to see why the issue of interchange fee caps has preoccupied retail banking headlines. When regulators originally proposed capping interchange fees at 12 cents per transaction, banks not exempt from the rule were expected to lose between $14 billion and $16 billion annually as a result of the rule.
After calling some of the nation’s largest banks to discover what banking customers can expect here’s yet another installment of MyBankTracker.com’s debit rewards:
- BMO Harris: A representative for the company told us that the bank will officially end its debit rewards program on Oct. 1, and that customers currently enrolled in the program would have until Dec. 31 to redeem their rewards.
- Susquehanna Bank: A rep for the bank told MyBankTracker.com that its debit rewards program ended at the end of July for both new and current enrollees. Customers in search of debit rewards should fret not though, as the bank says it is currently developing a new rewards program that won’t be tied to just one retail banking product.
- Umpqua Bank: While Umpqua doesn’t currently have debit rewards program it is looking into ways to rewards customers that consolidate their relationship with the bank. The bank, which has one free checking account option, is still reviewing what the impact of the Durbin rule will be on its business.
- Union Bank: A rep for the bank declined to comment on how the Durbin rule would affect its retail banking services.
If you don’t see your bank on our lists and have had to deal with changes to any banking services don’t hesitate to let us know. Sound off in our comments section or send us a tip at editor (at) mybanktracker.com.