News

Banks should charge debit card fees, BB&T CEO says

BB&T Corp Chief Executive Kelly King has recommended that banks move toward charging annual fees for debit cards.

During the company’s second-quarter earnings call, King said banks should charge an annual fee of approximately $25 for a debit card, a move that is a common practice for credit cards, according to Reuters.

Account holders, King said, could pay the fee in one yearly payment or make monthly payments of $2.

Banks are looking for ways to recoup revenue they stand to lose as a result of the Dodd-Frank financial reform law, crimping their traditional sources of income, including interchange fees.

A provision in the financial reform overhaul cut the fees that large banks can charge retailers for debit card transactions. The rule is expected to cost the banking industry about $9.4 billion each year, according to Reuters.

Some banks are considering a $30 annual fee for debit cards, according to the Wall Street Journal. In addition, banks are considering limiting the size of a purchase that a customer could make with a debit card.

Several credit card issuers have already eliminated debit card rewards programs, such as free checking accounts and cash back programs.  

King said that the Winston-Salem, North Carolina-based regional bank has decided to eliminate free checking accounts and that the bank hopes to recoup the lost revenue caused by the new industry rules, Reuters reports.
 

One Response to Banks should charge debit card fees, BB&T CEO says

  1. Adam Talbott says:

    Sometimes, a $3 billion bail out just isn’t enough. I make $25,000 a year, and you want to pilfer me for more. Bad idea, BB&T. USAA, here I come.