International Bancshares Corp. is closing 55 grocery-store branches in response to a new Federal Reserve rule that will cap what many banks can charge merchants for debit card transactions, the Laredo, Texas-based bank announced Sept. 22.
The $11.8 billion-asset International Bancshares is closing the branches so it can continue to offer free checking to its customers after new the new interchange rule takes effect Oct. 1, Norm Nixon, chairman and CEO, said in a news release. Since even before the Fed in June finalized its rule under a mandate from the so-called Durbin amendment to the Dodd-Frank Act, many large and regional banks have dropped free checking because of anticipated loss of revenue.
“Our customers have always made it clear to us that free products and services are extremely important to them,” Nixon said. “To keep those free offerings in place, we will have to reduce expenses. This means we will close 55 of our smaller in-store branches located in grocery stores.”
The company expects to eliminate about 500 jobs as a result of the branch closings, Nixon said.
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