Regions Financial Corp. has stopped offering its debit rewards program to new customers as it braces for the Durbin rule.
Spokeswoman Evelyn Mitchell confirmed Tuesday that the Birmingham, Ala., bank will no longer accept new enrollments in its Relationship Rewards program, which enabled customers to earn points on signature-based check card transactions, for using online banking and direct deposit, or by maintaining certain account balances. The points were redeemable for retail gift cards, travel and Regions banking services.
Existing customers enrolled in the program can continue to earn and redeem points, and other rewards programs, including Regions Cashback Rewards, are still in effect.
Mitchell said the bank suspended the program pending the Federal Reserve's final rule, which was mandated by the Durbin amendment of the Dodd-Frank Act. The Fed has proposed capping the fees banks can earn on debit card transactions at 12 cents.
Earlier Tuesday, PNC Financial Services Group Inc. said it was eliminating debit-card rewards on its basic checking accounts, in addition to other changes.
Banks have been vehemently opposed to the Durbin rule, saying that the cap does not take into account the costs to maintain a debit card program. The amendment is not yet final, but many banks have been making changes to their checking account structures and adding new fees in anticipation of lost revenue.
Mitchell said it's possible that it could reinstate the rewards program depending on the final rule.
"We're not ruling anything out at this point," she said.
The suspension of the debit rewards program was mentioned earlier Tuesday during a presentation by David Turner, Regions' chief financial officer, at a financial services conference in Boston.
