Debit card rewards have become endangered species at large banks, which are cutting the programs because of a possible cap on interchange fees. The laws which were passed in order to perfor4m financial reform the good of consumers are starting to have ripple effects. The cost of protection for customers may be a loss of convenience and some tighter conditions from financial institutions. Legislators are starting to debate whether financial reform is too costly to keep on the books. Resource for this article – More banks ending debit card rewards by MoneyBlogNewz.
Safeguarding customers take away rights
banks are desperately attempting to discover new ways to make money and save money. This is because of the proposed cap on interchange fees, also called "swipe fees," where merchants are required to pay banks anytime a card is swiped. Free checking programs and debit card rewards have landed on the chopping block. The debit card rewards program is being ended by JP Morgan Chase while others are following, CNN reports. Debit rewards are no longer offered to customers of Wells Fargo subsidiary Wachovia while April 15, Wells Fargo will follow. Right now, Citibank is "in the process of evaluating potential changes." More than likely, its advantages programs will also end.
Paying even additional for a financial reform to work
USA Today reports that the Government Accountability Office estimated a $1 billion per year price tag on the financial reform bill or Dodd Frank Act. The creation of a totally new agency, the Consumer Financial Protection Bureau, has already brought on controversy and infighting among lawmakers. Over 2,000 new employees would be needed to enforce laws, including the Consumer Financial Protection Bureau, in accordance with Government Accountability Office estimates. Congressional Republicans have been openly critical of the agency, which some assert has too much authority. The special adviser to the president in charge of setting up the agency, Elizabeth Warren, has defended the agency, saying the "Wall Street behemoths" that created the need for the agency should be targets, not the CFPB, in accordance with Bloomberg. All customer financial products will be reviewed by the agency that will be in charge of them, including personal loans and charge cards.
Credit could be lost
The financial reform laws are ones that are designed to protect consumers. Financial institutions won’t be able to trick customers into anything anymore. It might be a good idea. Still, financial institutions are already trying to make up for losses. Debit card advantages and free checking are falling by the wayside, but banks cannot impose fees with impunity. Loan credit is likely to get tighter, though that also means banks and loan companies cannot gouge consumers out of the blue. However, the debate is going to be whether the loss of convenience is worth it.