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Wells Fargo’s Response to Durbin Amendment

August 17, 2011

Wells Fargo Reacts to Durbin Amendment

Wells Fargo announced Tuesday it will start charging a $3 monthly fee for debit card usage to customers in Georgia, New Mexico, Nevada and Oregon beginning Oct. 14.//

 
“We regularly review our pricing and take into account the needs of our customers, industry trends, the market competition, and our cost of doing business,” a Wells Fargo spokeswoman said. Customers who don’t use their card during the month won’t be charged the fee and the fee will be waived for select accounts, she added.

 

As discussed in the FMSI white paper: The Impact of Federal Regulations on the Financial Services Industry, banks are taking a huge hit to their revenue stream from the Durbin AmendmentCharging additional fees directly to the consumer was a concern opponents of the amendment had.  Time will tell how consumers react to this $3 per month charge.  I for one am very curious to see how this beta test goes for Wells Fargo.

Excerpts taken from CNN Money article, Wells Fargo to test $3 a month debit card fee

3 Comments leave one →
  1. October 20, 2011 8:47 pm

    We just got Sen. Durbin’s response to Wells Fargo’s response. His calculations are correct, but what is his point? He accuses Wells Fargo of attempting to make a profit, “[i]nstead of making up costs.” Is Wells Fargo supposed to charge for its services just enough to cover its expenses? What about its shareholders’ interests?

    But what Sen. Durbin doesn’t mention in his letter is that the lost profits from interchange fees that Wells Fargo is now looking for ways to make up for have not actually disappeared into thin air, nor are they being passed on to consumers. Far from it. The $7 billion or so in annual interchange fees that the Durbin Amendment is costing issuers, are now being collected by retailers and most of it – by big-box stores (e.g. Wal-Mart and Target). It is up to them alone to pass any portion of the windfall on to consumers. If you believe that this will happen, well, I have a news for you.

    The bottom line is that we are now suffering through the entirely predictable side effects of the Durbin Amendment’s passing, for which everyone who was paying attention warned when it was first proposed. Sen. Durbin should stop bullying businesses for acting in their shareholders’ best interests. http://blog.unibulmerchantservices.com/why-are-banks-charging-new-debit-card-fees

Trackbacks

  1. Bank of America’s Response to Durbin « FMSI VantagePoint Blog
  2. Bank of America’s Response to Durbin

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