Regions Financial Corp. is suspending its debit rewards program as it braces for the impacts of reduced interchange revenue from pending rate caps proposed by the Federal Reserve Board.
The Birmingham, Ala.-based bank no longerwill accept new enrollments in its Relationship Rewards program, which enabled customers to earn points on signature-based check card transactions, for using online banking and direct deposit or by maintaining certain account balances, spokesperson Evelyn Mitchell confirms. The points were redeemable for retail gift cards, travel and Regions banking services.
Existing customers enrolled in the program may continue to earn and redeem points, and other rewards programs, including Regions Cashback Rewards, are still in effect.
The bank suspended the program pending the Fed’s final rule, which was mandated by the Durbin amendment of the Dodd-Frank Act, Mitchell said . The Fed has proposed capping the fees banks can earn on debit card transactions at 12 cents.
Earlier, PNC Financial Services Group Inc. said it was eliminating debit card rewards on its basic checking accounts, in addition to other changes.
Banks have been vehemently opposed to the Durbin rule, saying that the cap does not take into account the costs to maintain a debit card program. The amendment is not yet final, but many banks have been making changes to their checking account structures and adding new fees in anticipation of lost revenue.
Mitchell says it is possible the bank could reinstate the rewards program, depending on the final rule.
“We’re not ruling anything out at this point,” she says.
The suspension of the debit rewards program was mentioned during a March 1 presentation by David Turner, Regions’ chief financial officer, at a financial services conference in Boston.
