Banks continue to struggle to find ways to recover lost revenue under the Durbin Amendment and are showing signs that they will soon begin steering consumers away from debit and towards credit and prepaid cards.
During a recently held financial industry conference, executives from the major U.S. banks, including SunTrust, BB&T and Fifth Third, said that they are trying to find ways to recoup lost revenue because the Durbin Amendment drastically reduced the amount they are allowed to collect on interchange fees, Zacks.com reports.
After the interchange rule went into effect, many banks, including Bank of America, Wells Fargo and JP Morgan Chase & Co., announced that they would impose debit card usage fees on customers. Public outrage prompted the banks to rethink those plans.
The next logical step, banks have decided, is to encourage credit and prepaid card use, according to Zacks.com. The Durbin Amendment only capped the interchange fees on debit cards and banks and card issuers are able to collect more on credit and prepaid transactions.
Many consumer advocate groups are already preparing for another round of lobbying on Capitol Hill to urge Congress to place a cap on interchange fees for credit cards as well.
Credit card issuers have already begun enticing consumers with credit cards. According to Forbes.com, more consumers are being approved for new cards this year than last. Only 14 percent of consumers were denied a card in 2011, while 24 percent were denied in 2010.