Bank of America Corp., Wells Fargo & Co. and JPMorgan Chase & Co., the three biggest U.S. debit card issuers, may face $1.38 billion in annual lost revenue from a proposed cap on interchange fees, according to Moody's Investors Service.

Pretax net income may drop 3.4% at B of A, 2.7% at Wells Fargo and 2% at JPMorgan Chase if Congress approves the regulatory reform bill, Moody's said in a report Monday. The legislation would empower the Federal Reserve to set interchange fees that are "reasonable and proportional" to the cost of processing debit transactions.

Moody's based its estimates on the banks' first-quarter pretax profits, a 50% reduction in swipe fees and an assumption that the lenders would recoup half the lost revenue through new fees and "other actions." After those efforts, the interchange caps may cut revenue by $589 million at B of A, $438 million at Wells Fargo and $356 million at JPMorgan Chase, Moody's said.

"The legislation is credit-negative for debit card issuers," Moody's analyst Curt Beaudouin said in the report.

B of A spokesman Scott Silvestri and JPMorgan Chase's Tom Kelly declined to comment. Wells Fargo spokeswoman Lisa Westermann did not respond to a request for comment.

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