In the past, consumers who were wary of dealing with credit card debt could instead enroll in some banks’ debit card rewards programs, but now many no longer give the option.
As a result of greater federal regulation that has limited banks’ revenues from fees and interest rates, many financial institutions are now preventing consumers from obtaining new debit card rewards programs and some are also eliminating the programs completely, according to a report from the Minneapolis Star Tribune. U.S. Bank, JPMorgan Chase and Wells Fargo have all done so in recent weeks and more are expected to follow in the coming months.
This change comes in response to a proposed rule from the Federal Reserve that limits the amount banks can charge merchants for processing debit transactions to just 12 cents per purchase, the report said. Currently, the average transaction costs these companies about 44 cents.
Banks have stepped up lobbying efforts in response to these changes, encouraging sympathetic lawmakers to push for both a delay of the rule and greater oversight of the new Consumer Financial Protection Bureau.