Regions collected $346 million in such fees last year, Chief Financial Officer David Turner said today 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, referring to rules proposed by the Federal Reserve. The lender may have to decide whether to “even offer a debit card, or, if we do, have the customer pay for that,” he said.
The U.S. Senate today rejected a delay of the caps, which are set to take effect July 21. The Fed has proposed capping the fees at 12 cents a transaction, replacing a formula that averages 1.14 percent of the purchase price.
Regions agreed to purchase its branded $1 billion credit- card portfolio from FIA Card Services, the Birmingham-based lender said yesterday in a statement. The acquisition of 500,000 existing Regions’ accounts is part of the bank’s strategy to mitigate potential losses of swipe-fee revenue, Turner said.
“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.
Regions rose 6 cents to $6.13 at 4:15 p.m. in New York Stock Exchange Composite trading. The shares have fallen 13 percent this year.
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