Bob Williams

Proposed law would make it easier to switch banks, but at what cost?

April 1st, 2012 | Leave a comment | Tags: , , , , ,

I occasionally cover topics related to the financial services industry because my primary employment serves financial institution clients. There is a proposed bill in Congress right now that caught my attention for several reasons: consumer advocacy, government regulation of the banking industry, and implications in the marketing technology space.

A brief recap. The Freedom and Mobility in Consumer Banking Act, H.R. 3077, was introduced by Rep. Bradley Miller [D-NC13] on October 3, 2011.  The purpose of the act is to make it easier for consumers to close an account with one financial institution and move to another financial institution.  The legislation is supposed to increase competition between banks and provide …Continue reading >>

Bob Williams

Customer loyalty through debit card reward programs

February 11th, 2012 | Leave a comment | Tags: , , , ,

Debit cards received significant attention in 2011 after the Durbin amendment in the Dodd-Frank Act set the maximum interchange fee for a single card transaction to 21 cents plus .05% of the purchase charge. Large banks responded by removing debit card rewards programs and introducing debit card usage fees.  The new fees were not popular with the public and the large banks soon reversed the fees due to customer complaints and a reduction in new account openings.

Then merchant-funded reward programsappeared as a derivation of the rewards program and resulting fees. In this program, a local merchant works with a bank or credit union to offer a discount/reward to the …Continue reading >>

Bob Williams

Two Worlds

October 17th, 2011 | One comment | Tags: , , ,

These two tweets appeared side-by-side on my Tweetdeck stream. I couldn’t resist taking a picture.

of record profits, debit card fees, customer retention, and customer acquisition

Bob Williams

A case for customer focus in the midst of financial regulation

April 3rd, 2011 | 2 comments | Tags: , , , ,

 

Banks are reacting to loss of fee income by creating new fees and dropping services.

Financial institutions across the country are reacting to the impact of Regulation E changes and the Durbin Amendment to the Dodd-Frank Act. The Regulation E changes of 2010 prohibit financial institutions from charging consumers fees for overdrafts on ATM and debit card transactions unless the consumer consents to be charged a fee.  The Durbin Amendment states that interchange fees for debit card transactions must be “reasonable and proportionate” to the actual processing costs incurred by the issuer.  The proposed interchange fee cap is 12 cents per transaction, well below today’s average of 44 cents per …Continue reading >>