The nation’s largest banks have been cutting consumer benefits. Next on the chopping block are debt card rewards. Debit card rewards will cease entirely in July at JP Morgan Chase, after not any longer offering enrollment in the program in Feb. Card benefits are the latest casualty in the ongoing battle of interchange fees. Regulations could limit the fees charged to merchants by banks, which could inhibit revenue at financial institutions.
Banks contend they’ll be brought low with interchange fee cap
The possible cap on interchange fees, or the fees banks charge merchants to transmit payment from debit purchases, has brought on the nation's largest banks to start curtailing consumer rewards and incentives, such as free checking. Bloomberg states that debit card rewards will most likely be the next thing to disappear. In Feb., Chase stopped offering debit card rewards programs to any new consumers which started this. On July 19, all reward programs will end for Chase although anybody that has rewards will nevertheless be able to use them. Soon, it is possible that consumers may have to pay way too much to get their own money out of the financial institution. Same day loans might be necessary.
High ATM fees
The changes to financial laws are causing even more fees to be added other places. MSNBC states that ATM fees have already started going up. The second largest American bank is JP Morgan Chase. anyone who is not a member has to be paying the $4 and $5 tested fees on ATMs now. In TX, the fee is $4. The tested fee of $5 is appearing in Illinois. The $3 non-customer fee that Chase already had is remaining the same in other states even though the national average is $2.33 below that. Chase consumers will still pay only $2 per transaction at non-Chase ATMs, which is also above the $1.41 national average. Chase has the second largest ATM network in the nation. More than likely, Wells Fargo and Bank of America are soon to follow as TD Bank and Citi have already started changes. The idea of Chase, Bank of America and Wells Fargo having to run for installment loans because legislation prevents them from gouging customers is not likely to cause many people discomfort, but there&! #8217;s a catch.
Even credit unions would have a difficult time
The Durbin Amendment to the Dodd Frank Act is something that the National Association of Federal Credit Unions and other credit union trade groups oppose because they charge interchange fees just like for-profit banks, states Forbes. For-profit banks can manage a huge drop in revenue much better than community banks and credit unions. This change would go from the average of 44 cents per transaction with the Federal Reserve proposal to a maximum of 12 cents per transaction. To be able to study what would occur, the Durbin Amendment cannot take place for at least 2 years. The House of Representatives and Senate are seeing the bills currently.
Citations
Bloomberg
bloomberg.com/news/2011-03-21/jpmorgan-will-cease-debit-card-rewards-program-because-of-proposed-fee-cap.html
MSNBC
msnbc.msn.com/id/42130464/ns/business-your_retirement/
Forbes
blogs.forbes.com/moneybuilder/2011/03/03/the-durbin-amendments-effect-on-credit-unions/
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