First Hawaiian Bank will drop all rewards for debit cards for its customers in Hawaii, Guam and Saipan by the end of the week as a result of the Durbin Amendment, the bank recently announced.
First Hawaiian sent notifications to its Hawaii customers warning them that, as of the upcoming weekend, Priority Rewards CashPoints will no longer be available on their purchases, according to BizJournals.com.
Guam customers were informed that they would no longer receive Continental Airlines OnePass miles on their purchases.
The bank, which is based in Honolulu, is directly placing the blame on a new federal regulation that caps the amount it is allowed to charge for debit card transactions, BizJournals.com reports.
The regulation, known as the Durbin Amendment, has other ramifications including leading Visa to raise fees that merchants pay for small-amount purchases. While these card issuers set the rates, the banks will collect the fees.
Banks are also implementing non-interest checking account fees and have increased ATM and overdraft fees in response to the regulation.
The Durbin Amendment was a provision included in last year’s Dodd-Frank financial overhaul legislation.
An amendment was introduced earlier this year to delay the rule in order to allow time for a more in depth study of its economic impact. Sen. Daniel Akaka (D-Hawaii), a member on the Senate Banking Committee, co-sponsored the amendment.
The amendment ultimately failed and the Durbin Amendment is set to take effect on Oct. 1.