JPMorgan Chase & Co. plans to end debit rewards for at least some existing customers in July, according to a letter the issuer is sending to customers that cites the Durbin amendment as its reason.
“Congress recently enacted a new law known as the Durbin Amendment that significantly impacts debit cards,” the New York-based company’s letter notes. “As a result of this law, we will be changing our debit rewards program.”
In accordance with the law, the Federal Reserve Board proposed capping the fees that issuers earn on debit transactions at 12 cents. The current average is 44 cents.
Customers may use their Chase Freedom Credit Card, which the Fed’s proposed cap would not affect, to continue earning points, Chase notes in the letter.
Chase stopped issuing debit rewards cards to new customers in February, a decision it announced in November (
In its letter, Chase states that debit rewards customers will not earn points on purchases after July 19, two days before the interchange caps are to take effect. To earn points, transactions must post to a customers’ account by July 22, a footnote to the letter states. Customers’ points will not expire, and they will not need to receive a new card, according to the letter.
The letter did not say how many customers are affected by the new policy. A Chase spokesperson said March 20 Chase could not immediately provide comment.
Chase and other large debit card issuers, including Bank of America Corp., have also added new monthly fees for checking account customers, blaming the Durbin amendment.
An executive at Chase said in February that the bank was also considering capping the size of transactions customers can make with a debit card as a way to curb fraud. The Fed’s proposed interchange caps do not take into account the cost of fraud.
Chase also testing ATM noncustomer surcharges as high as $5 in some areas (
