News

Wells Fargo rewards program another Durbin Amendment casualty

Wells Fargo announced on Monday that it will end its debit card rewards program for existing customers, confirming predictions that the Durbin Amendment that capped debit card fees would ultimately hurt consumers.  

Beginning in October, customers who are enrolled in Wells Fargo’s debit card rewards program will no longer receive points for their debit card purchases, BizJournals.com reports.

Customers have been receiving a point for every $4 they spend on their debit cards and earn up to 16 points for every dollar spent at certain retailers.

Wells Fargo customers who enrolled themselves in the debit card rewards program paid a $12 annual fee, which they will no longer pay once the program ends.

The bank already cut the program for new customers earlier this year.

Chase, SunTrust and USAA are among the handful of banks that have announced they are ending their debit card rewards programs, BizJournals.com reports. The banks blame the change on the Durbin Amendment, which severely cut the amount banks are allowed to charge retailers for every debit card transaction.

Banks have used the interchange fees to subsidize rewards programs and said that the new cap eliminates funding for the programs.

On the Senate floor during debate on his amendment, Sen. Dick Durbin (D-Ill.) said banks used the interchange fees as a “growing profit center and to pay for cardholder perks like rewards programs.”

Durbin maintained that the fees were self-serving and used to promote the issuance of more cards.

Comments are closed.