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NEW YORK (Dow Jones)--Wells Fargo & Co. (WFC) is joining a growing number of banks that are introducing or

Wells Fargo to pilot $3 monthly debit-card fee in some markets

--SunTrust and Regions among those that will charge fee

--TCF Financial predicts every bank will end up with some fee



By Matthias Rieker and David Benoit

 testing a monthly fee for debit cards, casting around for revenue lost to debit-card regulatory restrictions.

Wells Fargo, the nation's second-largest bank by deposits, will charge a $3 fee for debit and automated-teller-machine cards as of Oct. 14 in several states if such cards are used for purchases (but not for ATM usage). The bank said it is a pilot program, and it will monitor how people respond.

J.P. Morgan Chase & Co. (JPM) has been testing a fee in a small market in Wisconsin since February. Other banks, such as Regions Financial Corp. (RF) and SunTrust Banks Inc. (STI), decided recently that debit cards for some of their checking-account customers will carry a $4 and $5 monthly fee, respectively. Like Wells Fargo, Regions said it will charge the fee only if the card is used for purchases.

TCF Financial Corp. (TCB) is mulling monthly debit-card fees for customers as well as charging customers who use their cards more than a certain number of times, a spokesman said. "Every bank around I think will ultimately end up with some type of fee," he said. "We are in the decision phase."

Laurie Readhead, a retail banking executive at Bank of America Corp. (BAC), told investors in May that "Pricing for debit cards, that's something that we're talking about potentially testing." A spokeswoman for the nation's largest bank by assets and deposits said Wednesday it wasn't testing a debit fee at this time, "but we are evaluating pricing across all our payments products."

Already, Wells Fargo and other banks have stripped debit cards of reward points because bankers said they will lose hundreds of millions in revenue after the Federal Reserve decided to lower the fee that banks can charge merchants for debit-card transactions.

The Fed's action was required by the Durbin amendment to the Dodd-Frank law that overhauled regulation for the financial-services industry after the mortgage meltdown. Banks were furious about the new restrictions.

Several banks, including Wells Fargo, had warned they were looking for ways to offset lost revenue. TCF, a large debit-card issuer, had taken the Federal Reserve to court over the Durbin amendment. One bank was mulling calling a new fee the "Durbin fee" on account statements, according to a person familiar with the matter.

Wells Fargo is introducing the new fee in a milder manner: A simple "important fee change information" letter was emailed to customers, or mailed as an insert with the monthly statements.

A spokeswoman wouldn't say how long Wells Fargo is planning to run the pilot in Washington, Georgia, New Mexico, Nevada, and Oregon. Wells Fargo will be watching customer response. "That's why it's a test," she said. "Some people understand why we do this but others don't like fees regardless" of the reason.

Some banks are holding out--or even staying away from the fee. U.S. Bancorp (USB) and Capital One Financial Corp. (COF) have no plans to charge fees, representatives said. Capital One even kept its debit-card rewards program. PNC Financial Services Group Inc. (PNC) stripped rewards from those customers who chose a free checking account.

-By Matthias Rieker, Dow Jones Newswires; 212-416-2471; matthias.rieker@dowjones.com



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