Regions Financial Corp. said a proposed rule that caps debit card fees may cost the lender 75% of its revenue from that business.
Regions collected $346 million in such fees last year, Chief Financial Officer David Turner said Wednesday 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 Board. 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.
Regions agreed to purchase its branded $1 billion credit-card portfolio from FIA Card Services, the Birmingham lender said Tuesday. The acquisition of 500,000 existing Regions' accounts is part of the bank's strategy to mitigate potential losses of debit-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.
