According to CreditNewsline.com, Laredo, Texas-based International Bancshares Corp. said Friday that it will close 55 grocery store branches and lay off 500 people in what the article calls a response to the Durbin Amendment.
The Amendment, which will go into effect Oct. 1, puts a cap on what banks can charge merchants for debit card transactions.
"Government many times passes regulations that end up hurting the very people they were intended to help," said Dennis Nixon, International Bancshares Corp. chairman and CEO. "This appears to be one of those cases."
According to the article, the bank is closing the branches in order to continue offering free checking to its customers. The bank said it relied on revenue from debit card fees to cover the cost of free products and services for consumers.
"Our customers have always made it clear to us that free products and services are extremely important to them," Nixon said. "To keep those free offerings in place, we will have to reduce expenses. This means we will close 55 of our smaller in-store branches located in grocery stores."
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