NEW YORK (
Chairman Ben Bernanke said that new rules clamping down on interchange fees will not be in place by an April 21 deadline, according to a
report that cites a letter sent to Congress Tuesday.
were up 4% in early trading to $74.95.
was also up 4%, changing hands at $261.09.
The new rules will implement the Durbin Amendment of the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Obama last July.
Since the Fed in December first proposed a maximum interchange fee of 12 cents per transaction, there has been a groundswell of negative reaction, including a lawsuit by
, which is supported by industry groups including America's Community Bankers, and over 11,000 comment letters received by the Fed.
Bernanke said the Federal Reserve needs the extra time to study the comment letters, but is committed to having a finalized rule by July 21.
TCF Financial said in its annual report that the "reduction in TCF's average interchange rate after July 21, 2011 could approach 85%," if the new rules as originally proposed by the Federal Reserve became permanent.
Bank of America
has said the limit on interchange fees could cost the company $2.3 billion in annual revenue.
The Durbin Amendment's fee limitation applies to banks with over $10 billion in total assets. According to a March 25 report from Mat O'Connor of
, large banks with interchange fees contributing a large percentage estimated of earnings per share for 2011 include TCF Financial, with 25% of estimated EPS coming from interchange fees;
with interchange fees contributing 23% of estimated earnings;
, with 13% of estimated earnings derived from interchange fees; and Bank of America and
M&T Bank Corp.
, with 11% apiece.
Written by Philip van Doorn in Jupiter, Fla.
To contact the writer, click here:
To follow the writer on Twitter, go to
To submit a news tip, send an email to:
Philip W. van Doorn is a member of TheStreet's banking and finance team, commenting on industry and regulatory trends. He previously served as the senior analyst for TheStreet.com Ratings, responsible for assigning financial strength ratings to banks and savings and loan institutions. Mr. van Doorn previously served as a loan operations officer at Riverside National Bank in Fort Pierce, Fla., and as a credit analyst at the Federal Home Loan Bank of New York, where he monitored banks in New York, New Jersey and Puerto Rico. Mr. van Doorn has additional experience in the mutual fund and computer software industries. He holds a bachelor of science in business administration from Long Island University.