Analysts point to falling bank revenues for Durbin Amendment’s impact

The impact of the Durbin Amendment is evident in the loss of revenue felt by large banks such as Bank of America and Wells Fargo, according to analysts.

Rochdale Securities analyst Richard Bove estimated on Tuesday that significant cuts at both banks were the result of the Durbin Amendment. Bove was pessimistic on the banks' ability to earn that loss back.

"It no longer appears that the bank is going to recapture the funds lost to the Durbin Amendment,” Bove wrote in his Bank of America report, according to “Capital Markets may produce less than expected investment banking revenue, and the various investment management businesses are producing less then hoped for.”

Wells Fargo, according to Bove, also lacks a solid response to the Durbin Amendment that will help it re-acquire lost revenue.

Stifel Nicholaus analyst Christopher Mutascio, however, has pinned Wells Fargo as "the only large cap bank under our coverage in which we and the consensus believe it can overcome the sequential-quarter negative ramifications of the lost debit interchange fees from the implementation of the Durbin Amendment,” according to

Brian Moynihan, Bank of America's CEO, eased investors’ concerns during a presentation on Tuesday by saying the bank’s card service is in full recovery mode from both the recession and recent regulation.

He told investors that the bank's fourth quarter results will show an impact from the Durbin Amendment.

Comments are closed.