Wells Fargo stopping enrollment in debit rewards

NEW YORK (Reuters) – Wells Fargo & Co is stopping enrollment in its debit card rewards program, citing financial regulations that will cut certain fees associated with the cards.

The statement follows a similar announcement by JPMorgan Chase & Co.

Wells Fargo said in a statement on Friday it would stop enrolling new customers in its debit card rewards programs. Customers who are already enrolled will continue to earn rewards, the bank said.

Banks largely fund debit rewards programs from their processing fee revenues. They said last year’s Dodd-Frank law, which called for the Fed to create rules limiting interchange fees, was too harsh and warned of dire consequences if the fees were cut.

Interchange fees are the charges banks and card networks impose on retailers when a customer uses a debit card. U.S. regulators proposed a 75 percent cut in those fees in December.

Bank of America Corp, the largest U.S. bank, has said it could lose $1.8 billion to $2.3 billion in annual revenue from debit card fee limits.

Wachovia will stop enrollment on March 27, while Wells Fargo will stop on April 15.

(Reporting by Clare Baldwin; editing by Richard Chang and Andre Grenon)

Wells Fargo stopping enrollment in debit rewards