ICBA Surveys Membership Group on Durbin Impact

Credit Card Interest Rates: Well-Intended, But Asking the Wrong People

Credit Card Interest Rates: Well-Intended, But Asking the Wrong People

The ICBA, who represents one the largest groups of financial institutions in the country, released the results of their member survey designed to gauge the anticipated impact of the Durbin Amendment on small/medium-sized issuers. The results indicate a great deal of pessimism within this market.

• Free checking accounts will be a thing of the past. 72 percent of community banks say they will no longer be able to afford free checking accounts because of the new law and the Federal Reserve rule.
• Nearly 70 percent of community banks say they will have to charge for services that are now free, such as online or mobile banking.
•Nearly half of community banks say the rule will harm their customers because it will make it difficult for them to continue offering competitive rates on deposits and loans.

The results of this survey may help to formalize the position the ICBA and other similar organizations, such as the NCUA, have taken with regard to the impact of the Durbin Amendment. In effect, it seems highly unlikely that the Fed will be able to protect any one market segment from the changes in retail banking models that are even now taking place.

Read more: http://www.benzinga.com/press-releases/11/02/p862794/survey-fed-debit-card-rule-will-harm-community-bank-customers#ixzz1E9G8YNkP

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