Correction: An earlier version of this story repeated an error that was in a version of the story by Dow Jones. It erroneously said U.S. Bancorp dropped debit rewards for existing customers; the bank has dropped debit rewards only for new customers.
NEW YORK — Wells Fargo & Co. is the latest bank to stop offering new customers reward programs for debit cards.
No decisions have been made regarding the future of debit card rewards for those already enrolled, a spokeswoman said. However, Wells Fargo will discontinue for all customers a rewards program that allows them to combine their debit card and credit card rewards in a single program.
The San Francisco bank, the fourth largest in the U.S. by assets, said Friday it dropped the rewards in response to the Dodd-Frank financial services overhaul legislation, which seeks to limit the fees banks can charge merchants in processing debit card transactions.
Wells Fargo, along with its big bank peers, has argued that such restrictions would result in a significant reduction in fees it gets from retailers which customers pay with their debit cards.
"Government price controls such as [restriction on debit fees] make no sense. They distort our market-based, free-enterprise economy," Wells Fargo Chief Executive John Stumpf said in his annual shareholder letter posted on the bank's website earlier this month.
Recently, banks have found allies in their effort to push back the debit part of the legislation, scheduled to take effect in July. Sen. Jon Tester, D-Mont., along with other senators from both parties, introduced a bill this week that seeks to suspend implementation of the proposed rule and calls for a two-year study of debit-interchange fees.
Tester told reporters during a conference call last week that the banks weren't the ones who convinced him that the restriction should be further examined before implemented. Instead, he cited concerns the measure may end up hurting consumers.
Still, despite heavy lobbying, banks have started to implement measures to offset the hit they would take if the restriction goes into effect. U.S. Bancorp dropped debit rewards for new customers. JPMorgan Chase & Co. will discontinue all debit rewards for new and existing customers as of July 12.
