U.S. bank CEO club works to ease Fed's debit fee limits
* U.S. bank CEOs form working group to defend debit fees
* BofA, Wells lobby Fed and Congress over Dodd-Frank law
* Industry trying to save some $13 bln in debit revenue
By Joe Rauch and Maria Aspan
CHARLOTTE/NEW YORK, Feb 4 (Reuters) - The heads of large U.S. banks have formed a group to pressure Washington to change rules that limit their fees for processing debit card transactions.
The proposed U.S. regulations could cost the banking industry some $13 billion of an estimated $23 billion in annual debit card processing revenue, according to CardHub.com.
The largest U.S. banks, who would lose the most revenue from the proposals, have formed a working group to convince Washington to amend, delay or repeal the debit card fee caps, Bank of America Corp (BAC.N) Chief Financial Officer Charles Noski told Reuters in a recent interview.
The Federal Reserve in December proposed a cap on the fees that merchants pay to banks and card networks like Visa when a customer buys something with a debit card. The rules were required under the Dodd-Frank financial reform law.
"The bank CEOs have been collaborating with the Fed on this," Noski told Reuters in January, noting the discussions were a "work in progress."
Fed spokeswoman Susan Stawick declined to comment on Friday.
Bank of America, the nation's largest bank, said last month it alone expects to lose some $1 billion in debit card revenue beginning in the second half of this year. [ID:nN21195772]
Noski would not be more specific about the group, but other large U.S. bank heads alluded to it this week.
"I'm trying along with others in the industry to make customers aware and Congress aware that there might be a better way to do this," Wells Fargo & Co (WFC.N) CEO John Stumpf told investors during a presentation on Tuesday.
JPMorgan Chase & Co (JPM.N) is also lobbying against the fee caps, a person familiar with the matter said. Bank chief Jamie Dimon and his executives have been outspoken about their dislike for the law's limits on debit fees.
"It makes no sense, it's going to have negative consequences, and it is a bad precedent for business broadly," JPMorgan Chase retail bank head Charlie Scharf told investors in November.
The bank CEOs' efforts come on top of furious attempts by Visa Inc (V.N) and MasterCard Inc (MA.N) to push Washington regulators away from the fee caps. The world's two largest transaction processing networks are looking to both Congress and the Fed for relief, although industry experts -- and even the companies themselves -- are not entirely optimistic about the likelihood of success. [ID:nN01140858]
MasterCard CEO Ajay Banga told investors on Thursday that he has personally traveled to Washington "several" times in recent weeks to bend the ears of lawmakers and regulators.
But still, he said, "I don't know if that will lead to any change." [ID:nN02215315] (Reporting by Joe Rauch in Charlotte and Maria Aspan in New York; additional reporting by Elinor Comlay in New York; Editing by Gary Hill)
- Somali officials say U.S. struck where al Shabaab were meeting
- Marilyn Monroe sex film to be kept private |
- Ukraine accuses Russia of 'undisguised aggression' as rebels advance |
- Actress Jennifer Lawrence contacts authorities after nude photos hacked
- Risk appetite flickers in Europe, ECB speculation holds down euro