Wells Fargo accountholders in the states of New Mexico, Oregon, Georgia, Washington and Nevada should brace themselves to be hit with additional fees this fall. Beginning on October 14, the bank intends to test out a “debit card activity fee” in those states. Customers will be charged a $3 fee each month they make a purchase using their card, regardless of whether they select to process the transaction as “debit” or “credit,” reports the website mybanktracker.com.
“An extra fee that I don’t need. It’s not like I can’t handle it, but no I don’t like it,” one customer told KRQE News 13, a local news station in Albuquerque, New Mexico, one of the areas that will be first hit by the new fee. Customers wishing to avoid the fee altogether can do so by only pulling out their cards at the ATM or else by making payments from their account online alone.
Many banks are experimenting with cutting perks and issuing additional fees in an effort to recoup some of the loss in revenue they will suffer once the Durbin Amendment goes into effect. Under those debit card fee caps, which are slated for this coming October, it is predicted that Wells Fargo will lose nearly $812.5 million annually in debit interchange fee revenue. The lending institution estimates that the $3 debit card fee would save them over $200 million in losses each year, should it be implemented nationwide. They also plan to eliminate all debit rewards programs.
“This comes as no surprise to us. It was a foregone conclusion that when the bill passed, this is what would happen,” said President of the Consumer Bankers Association Richard Hunt, to CBS’ moneywatch.com. “When [the Senate] told banks what they could not could not charge on a product … we told them consumers would ultimately bear the cost.”
Lisa Westermann, a Wells Fargo spokeswoman, said in an email to moneywatch.com: “In WFC’s earnings announcement we talked about recovering 50% of the lost revenue over time through product changes and volume growth. This is one of those ways we are looking at recouping lost revenue. We regularly review our pricing and take into account the needs of our customers, industry trends, the market competition and our cost of doing business. Our goal is to set a fair price that is consistent with the value of each product or service.”
The five-state trial is the bank’s attempt to evaluate consumer response before deciding whether or not to introduce the fee nationwide, which would go on to affect approximately 40 million customers.