Wells Fargo to stop enrolling customers in debit-card rewards program April 15; Chase, PNC also curtailing their debit-card programs as result of pending regulation limiting fees banks can collect from merchants
March 28, 2011
– Another bank is ending its debit rewards program. Wells Fargo says it will stop enrolling new customers in its debit card rewards program as of April 15. The San Francisco-based bank says customers who are already enrolled in the program will continue to earn rewards for now.
Wells Fargo says the change is the result of a pending new regulation that is expected to dramatically limit the fees banks can collect from merchants whenever customers swipe their cards.
The cap on fees was mandated last year under the financial overhaul known as the Dodd-Frank Act. The current proposal would cap fees at 12 cents per transaction, versus the current 1 percent to 2 percent of the transaction amount.
The banking industry says the change could slash its debit swipe fee revenue by as much as 90 percent.
A final rule is expected from the Federal Reserve by April 21, unless Congress delays the deadline.
The rule will take effect three months later.
Chase notified customers this month that they will no longer be able to earn points with their debit cards after July 19. The bank had already closed off enrollment in the rewards program to new customers as of Feb. 8.
PNC Bank, based in Pittsburgh, also notified customers this month that it will no longer give customers with free checking accounts reward points for debit card purchases as of Sept. 12.
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