International Bancshares Corp. in Laredo, Texas, announced Thursday that it is closing 55 grocery store branches in response to legislation that will cap what banks can charge merchants for debit card transactions.
In a news release, Chairman and Chief Executive Officer Dennis Nixon said that the $11.8 billion International Bancshares said it is closing the branches so that it can continue to offer free checking to its customers after new interchange legislation takes effect Oct. 1. Since the measure was passed last year, many large and regional banks have dropped free checking due to anticipated loss of revenue.
"Our customers have always made it clear to us that free products and services are extremely important to them," Nixon said. "To keep those free offerings in place, we will have to reduce expenses. This means we will close 55 of our smaller in-store branches located in grocery stores."
Nixon said that the company expects to eliminate about 500 jobs as a result of the branch closings.
