Wells Fargo Outlines (Some) Reform Costs

SAN FRANCISCO (TheStreet) -- Wells Fargo WFC management outlined the impact of some reform measures on Wednesday, but only those that will have relatively little impact. On a conference call Wednesday, CFO Howard Atkins said a change to overdraft-fee practices, known as "Reg E," will hit revenue by $525 million in the second half of the year. The impact of the CARD Act, which reins in credit-card fees and interest-rate hikes, will be $30 million, taken in the third quarter. Atkin noted the amount was "much smaller than our peers, given our significantly smaller credit card portfolio." He also believes that some customers will opt back into overdraft protection; combined with other types of "offsets," he said the Reg E costs will "diminish over time" from elevated levels in the next couple of quarters. The combined estimates are only 0.6% of the $85.6 billion in revenue that analysts expect Wells Fargo to deliver this year, according to Thomson Reuters. But management was far less specific in regards to another key regulatory change that stands to impact Wells Fargo much more. The Durbin interchange amendment is set to limit fees that banks can charge to merchants for accepting debit-card purchases. Wells Fargo is the second-largest debit-card issuer in the United States; Bank of America BAC is the largest. Bank of America's disclosure last week that it expects to take a write-down of up to $10 billion and a revenue hit of up to $2.3 billion a year from the change sparked a major bank-stock sell-off. It also led to criticism of JPMorgan Chase JPM and Citigroup C for not being more specific in their own estimates. To read the rest, head over to Market News and Data brought to you by Benzinga APIs

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