June 8, 2011
Alabama’s biggest bank, Regions Financial, may see its debit interchange revenue drop by 75 percent in light of the Federal Reserve’s proposed debit swipe fee caps.
Regions received $346 million in such fees last year, Bloomberg reports Chief Financial Officer David Turner said this week at an investor conference in New York.
“The 12-cent cap that they put on just isn’t even remotely close to covering our costs,” Turner said with regards to the Fed’s proposed interchange cap.
Bloomberg reports that Regions will buy its branded $1 billion credit- card portfolio from FIA Card Services, an acquisition of 500,000 existing Regions’ accounts that the bank hopes will offset possible interchange revenues losses.
“There will be some customers, that if you charge them for a debit card, they’ll just use a credit card, and that’s why we’re back into credit cards,” Turner said.
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Regions stock shares have dropped 13 percent this year, according to Bloomberg. Earlier this week, the Senate defeated a bill that would have delayed implementation of the Fed’s proposed debit interchange caps for six months to allow for further study of the regulation. (Read more)
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