US debit fee caps may hurt poorest customers-Dimon
* Americans could lose access to bank accounts -CEO Dimon
* Banks will raise fees as a result of Fed's proposed caps
By Maria Aspan
NEW YORK, Jan 14 (Reuters) - Federal limits on debit card processing fees will force banks to charge customers more for services, making accounts too expensive for as many as 5 percent of customers, JPMorgan Chase & Co's (JPM.N) chief executive said on Friday.
The rules, proposed as part of the Dodd-Frank financial reform law, would cap the fees that merchants pay banks for processing debit card transactions at 12 cents each. That is almost 75 percent less than the average 44 cents per transaction that banks get now. [ID:nN16280766]
U.S. banks could lose about $13 billion of their annual industry debit processing revenues because of the rules, which the Federal Reserve proposed last month.
Bank executives have said they will raise their fees to compensate for losing debit card processing revenues. They predict that some people will be unable to afford the fees, forcing them out of the banking system into the realm of check cashers and payday lenders. [ID:nN05288788]
The term that the banks use for this is "unbanked."
The rules "will have the adverse consequences of making a portion of current bank clients unbanked. You will not be able to profitably serve them," Dimon told analysts during the bank's fourth-quarter earnings conference call on Friday. [ID:nN14293086]
About 5 percent of today's banking customers "may be pushed out of the banking system," he said.
Dimon's comments were one of the first times a major U.S. bank executive has quantified the potential effect on consumers from the Fed's proposed rules. (Reporting by Maria Aspan. Editing by Robert MacMillan)
- Tweet this
- Share this
- Digg this
- Israel knocks out Gaza power plant, digs in for long fight |
- Special Report - Where Ukraine's separatists get their weapons
- Putin may have passed point of no-return over Ukraine
- Nigeria isolates hospital in Lagos as Obama briefed on Ebola outbreak
- West agrees wider Russia sanctions as Kiev says forces near crash site |