Saturday, August 27, 2011
Wells Fargo quits debit rewards
Wells Fargo Bank N.A. is again leading the industry in the rush to makeup losses imposed on the debit card industry by the Durbin Amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Wells Fargo recently launched a five-state trial of a monthly $3 debit card fee. The bank acknowledged the unprecedented fee is a response to the Durbin Amendment. Now Wells Fargo is terminating its debit cardholders' rewards program.
"Existing customers enrolled in rewards programs associated with debit cards will no longer earn points for their eligible debit card purchases or payments as of Oct. 8 [2011]," Wells Fargo & Co. Vice President of Public Relations for Card Services and Consumer Lending Lisa Westermann confirmed for The Green Sheet. "This includes transactions made through the Earn More Mall site for bonus points. Debit Rewards customers will continue to retain their rewards points."
Westermann said these changes do not apply to credit card customers. "We are making the changes due to recent regulatory changes resulting in a reduction in fees retailers pay banks for processing debit card transactions," she added.
The Durbin Amendment mandated the Federal Reserve Bank set interchange rates for debit cards. The Federal Reserve has set the new rate at 21 cents plus a small increase for fraud prevention and loss – a rate approximately half the industry average prior to the Fed's ruling.
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