BB&T CEO says banks should adopt debit fees

CHARLOTTE, North Carolina (Reuters) - U.S. banks should move toward charging annual fees for debit card use, BB&T Corp Chief Executive Kelly King said on Thursday.

King, who spoke during the company's second-quarter earnings call, said U.S. banks should follow what is common practice for credit cards, and charge an annual fee of about $25 for a debit card.

"My guess is when it settles out it will be something in that neighborhood," King said.

King said the fee could be made in one yearly payment, or broken into monthly payments of $2 for an account holder.

U.S. banks are looking for new revenue after the Dodd-Frank financial reform law -- passed by Congress last year -- crimped many traditional sources of income.

Part of Dodd-Frank known as the Durbin amendment cut what banks can charge in debit interchange fees, or what banks can charge merchants for processing debit card payments. The amendment in its current form is expected to cost the banking industry about $9.4 billion in annual revenue, out of $23 billion of total debit card processing fee revenue, according to CardHub.com.

King said on the call that the Winston-Salem, North Carolina-based regional bank is moving away from free checking accounts, and hopes to make up all of the lost revenue caused by the new industry rules.

(Reporting by Joe Rauch, editing by Gerald E. McCormick)