Wells Fargo & Co., the bank with the biggest U.S. branch network, will no longer enroll customers in debit-card rewards programs following a proposed cap on interchange fees.
"Due to pending regulatory changes that are expected to result in a significant reduction in fees retailers pay issuers for debit-card transactions, Wells Fargo will no longer be enrolling customers in the debit-card rewards programs," Lisa Westermann, a spokeswoman at the San Francisco-based bank, said in an e-mail.
The change includes both stand-alone programs and those where customers combine their debit and credit card into a single program, Westermann wrote. Customers already enrolled in the program and credit-card holders will not be affected.
Wells Fargo's change comes in response to a Federal Reserve rule, required as part of last year's Dodd-Frank law, that would cap the fee card networks can charge merchants at 12 cents a transaction. It replaces a formula that averages 1.14 percent of the purchase price or about 44 cents.
The new policy will take effect Sunday for customers with a Wachovia Corp. account and April 15 for Wells Fargo customers, according to the e-mail. Wells Fargo purchased Wachovia in 2008.
Wells Fargo offers programs that provide cash back, travel and merchandise awards, and gift cards among other options for consumers and businesses, Westermann said.
Banks fought passage of the legislation and are working with lawmakers to derail it. Sen. Jon Tester, D-Mont., is the chief sponsor of a bill that would delay the rule for two years, and Rep. Shelley Moore Capito, R-W.Va., introduced a similar measure.
If implementation is delayed or quashed, Wells Fargo may go back to offering the program, or change the policy announced Friday, Westermann said.
