Wells Fargo & Co. (WFC) Chief Executive Officer John Stumpf in his annual letter to shareholders asserted that capping debit interchange fees would “make no sense” and interfere with free- market economics, according to Bloomberg.
“What’s next?” Stumpf, 57, wrote. “Will the government require car dealers to sell a new vehicle for $5,000 or grocers a gallon of milk for 50 cents?”
Bloomberg reports that the Fed’s proposed debit rules could cut as much as $12 billion in annual revenue for issuers, like Bank of America and JPMorgan Chase.
“Banks should be fairly compensated for the value that debit cards create for merchants and their customers by reducing fraud risk and the cost of carrying cash or handling checks,” Stumpf wrote. “An 80 percent cut in this fee wouldn’t even enable us to cover the cost of providing the service.”
JPMorgan Chase recently announced that its debit card reward program would be coming to end mid-July, around the time when the new debit interchange regulations are scheduled to be implemented. (Read more) Sen. Jon Tester (D-MT) filed a bill last week to delay the implementation of the new debit swipe fee rules in order to allow more time for the potential impact of the regulations to be studied.
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