As predicted by banking execs across the country, a new federal law that takes effect Oct. 1 already has consumers picking up the tab for banks expecting to lose out on substantial revenues.
According to The Baton Rouge Business Report, Oct. 1 marks the start of new rules regarding swipe card fees, or the amount of money banks charge merchants for each debit card transaction.
Before the Dodd-Frank financial bill passed Congress with the included “Durbin Amendment” on swipe fees, banks charged an average of 44 cents for each transaction. The new 21-cent cap on swipe card fees is less than half of what banks were able to charge, prompting new banking fees for customers in an effort to recoup the losses.
Regions Bank South Louisiana Area President Danny Montelaro tells The Business Report that his bank expects to lose out on $9.5 million after the law takes effect, which is why the bank on Oct. 1 will begin charging $4 a month for its customers to use a debit card.
The Birmingham, Ala., based bank is introducing a handful of other fees for customers, though some of the increases can be waived if certain deposit and minimum balance requirements are met.
And Regions is not alone in its quest to recoup revenue. According to the Business Report, other banks such as Chase have made bold changes to counter the new law, while IberiaBank and Capital One remain tight-lipped on their strategies:
Chase Bank has done away with its rewards program, spokesman Greg Hassell says, but it has not added any fees for debit card use. On Aug. 24, Chase's Total Checking account—its most basic account, for which most new customers sign up—began charging a $12 monthly fee if minimum direct deposit and account balance requirements are not met.
But other banks with a presence in the Capital Region are reluctant to discuss the possibility of new fees. IberiaBank spokeswoman Beth Ardoin says no changes have been made to fee structures, adding that officials "see no benefit in getting involved in the conversation" about their strategy to recoup lost revenue from the swipe fee.
Read more from The Baton Rouge Business Report here.
For more on the uncertainty banks are feeling from the financial overhaul, read our June report from ABiz, “Regulatory Recession.”
Mellow Mushroom Pizza Bakers opens on Johnston.
Acadiana's Top 50 Private Companies
It would be an understatement to say Schumacher Group had a challenging year in 2013.
Hampton Toyota has been serving Acadiana as the premier Toyota dealership for more than 10 years. And now, the glossy Johnston Street dealership is looking forward to a makeover.
Even when Floyd Degueyter is on “vacation” he’s hard at work.
As the second largest metal heat treating company in the country, Analytic Stress Relieving Inc. has grown by leaps and bounds since its inception in 1979.
When the Prohibition era came to an end in 1933, Joseph R. Streva saw an opportunity to make a little extra money to supplement his day job.
When a hurricane hits, Brent Mouton doesn’t run. The convenience store chain owner is proof that the challenges of mother nature can almost break a business, but Mouton learned to grow out of temporary closure from near devastation in 2002 and of lost potential revenue.
By launching a Super PAC to end all Super PACs, our Top 50 keynote speaker hopes to change the game in Washington.
Oil Center-based private facility extends its offerings with special events venue in failed women’s store.
One year later, is his expansion plan paying off?
Newspaper industry insiders question John Georges’ expansion plan.
How the U.S. has gotten itself into another fine mess
The Heymann Center was transformed into a culinary adventure in mid-June for the EatLafayette kick-off event, A Taste of Lafayette, and for the third consecutive year, a sellout crowd filled the Cajundome Convention Center June 19 to hear LEDA chief Gregg Gothreaux’s State of the Economy report.
A look at recent hirings, promotions and other announcements from Acadiana's business community.
Anne Pyle puts a bow on a stellar, expectations-defying career with her latest venture.
The company currently has 10 branches throughout Louisiana, including an Ambassador Caffery location which opened last year.
Lawmakers have added $15 million to the attorney general's budget to pay for Louisiana's ongoing legal case against BP for damages caused by the 2010 Gulf oil spill.
The state's jobless rate rose to 5 percent in June from 4.9 percent in May. Louisiana's unemployment rate was 6.4 percent in June 2013.
Long-established private club opening special events venue in failed women’s store at Kaliste Saloom Road and Camellia Boulevard.
High-dollar legal teams are preparing to spar in federal court over the regional levee authority’s historic lawsuit against oil and gas companies, but a panel of volunteers could preempt those efforts when they meet in August.
May sales, the highest on record for the month at $534 million, increased 6.1 percent over May 2013.
Trendy Shi Shi is heading to the Ranch, longtime retail institution Partners’ Ltd. is relocating to Parc Lafayette, and ariel artist haven Vertical Barre is moving downtown.
There’s another debit/credit card scam making the rounds — the second this year — this time via a robo call purportedly from MidSouth Bank.
The 2014 Louisiana Annual Sales Tax Holiday exempts the first $2,500 of the purchase price of each eligible item for non-business use when the customer buys and accepts delivery of eligible property or places property on layaway.