57°
Cloudy
FRI
 83°
 55°
SAT
 82°
 54°
SUN
 80°
 54°
MON
 76°
 52°
TUE
 77°
 53°

Local banks say no to debit card fees

A day after the nation's biggest bank revealed it will charge customers who make purchases with debit cards, Sonoma County lenders said they had no intention of following suit.

Representatives of Redwood Credit Union, Exchange Bank, Summit State Bank and Bank of Marin said they had no plans to copy Bank of America's $5 monthly fee.

"It's just not something we want to do to our customers," said Tom Duryea, CEO of Summit State Bank. "I am not going to nickel-and-dime people over $5."

Their disinterest stands in contrast to other larger banks. Wells Fargo and J.P. Morgan have been testing a $3 fee for debit card purchases, joining Bank of America.

The difference reflects a change in the regulatory landscape. This weekend, new federal limits cap how much large banks can charge merchants for processing payments made with debit cards.

As a result, the average "swipe fee" per transaction will drop from 44 cents to 24 cents, a 45 percent drop that is expected to cost banks billions in revenue.

But the regulations only apply to banks with more than $10 billion in assets, a threshold that, for example, is more than six times the size of Exchange Bank.

"The big banks got hit with this and the smaller institutions did not," said Brad Hunter, senior vice president with Exchange Bank. "They are trying to recoup lost revenues."

Still smaller banks are wary their swipe fees will eventually be reduced, too, as large box-store retailers push back against higher fees.

"Merchants are not going to accept two tiers of pricing," said Viveca Ware, senior vice president of regulatory policy for Independent Community Bankers of America. "It's just not sustainable."


© The Press Democrat |  Terms of Service |  Privacy Policy |  Jobs With Us |  RSS |  Advertising |  Sonoma Media Investments |  Place an Ad
Switch to our Mobile View