Fourth Quarter Durbin Results Mix It Up

by Mercator Advisory Group 0

According to this article from, American Express received a lift in debit fee income in the fourth quarter of 2011 more likely due to their aggressive moves into the prepaid card business and CitiBank also experienced a muted impact. With a combination of less retail banking exposure, focus on affluent segments, and prominent credit card business, Citi should continue to come out ahead on Regulation II.

A final comment in the article speaks to some banks’ strategy to keep under the $10B regulatory threshold which is another unintended consequent of Durbin, fewer big bank mergers.

Another interesting impact from the controversial rule: some banks are avoiding the impact of Durbin by keeping assets under the $10 billion mark. Says SNL “By staying under $10 billion until after the new year, Houston-based Prosperity Bancshares Inc. will not have to forego $5 million in lost debit interchange revenue, according to David Zalman, Prosperity’s chairman and CEO, who was speaking during the company’s 2011 earnings conference call.”

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