Wayzata, Minn.-based TCF bank reported Tuesday that its fourth-quarter profits were slashed to half the levels of a year ago, according to a news story in the Minneapolis StarTribune. TCF Chairman Bill Cooper blamed the Durbin Amendment for part of the drop in earnings. TCF card revenue was down more than 50 percent year over year.
Part of the Dodd-Frank financial regulation overhaul, the Durbin Amendment imposed new regulations that cut the "swipe fees" banks can charge retailers to process debit card transactions. The legislation took effect October 1, 2011.
In reaction to new regulations on overdraft fees, TCF started the fourth quarter with a new system, charging customers $28 a day when they overdraw their checking accounts, instead of charging per transaction.
The overdraft change didn't boost revenue as investors expected, said Jon Arfstrom, banking analyst with RBC Capital Markets in Minneapolis. "I think you now have Durbin and the account structure change [overdraft] fully in the numbers," he said. "Those are obviously two big body blows that the company has had to endure."
