Wells Fargo & Co. (NYSE: WFC) said on Monday that new federal regulation to limit overdraft fees will reduce its 2010 revenue by about $500 million from losses during the second half of the year alone.
The Federal Reserve moved to ban overdraft fees on ATM machines and debit-card transactions unless consumers had actively solicited an overdraft protection service in November 2009. The Dodd-Frank Wall Street Reform and Consumer Protection Act became law on July 21st, the widest reaching financial reform legislation in modern history.
“We currently estimate that the combination of these changes will reduce our 2010 fee revenue by approximately $225 million (after tax) in third quarter 2010 and $275 million in fourth quarter 2010,” said the San Francisco-based bank in a filing with the U.S. Securities and Exchange Commission on Monday.
“The ultimate impact of the Dodd-Frank Act cannot be determined,” the bank said.
Wells Fargo & Company is a diversified financial services company. The Company provides retail, commercial and corporate banking services through banking stores located in 39 states and the District of Columbia. It provides other financial services, through subsidiaries engaged in various businesses, principally wholesale banking, mortgage banking, consumer finance, equipment leasing, agricultural finance, commercial finance, securities brokerage and investment banking, insurance agency and brokerage services, computer and data processing services, trust services, investment advisory services, mortgage-backed securities servicing and venture capital investment. The Company operates in three segments: Community Banking, Wholesale Banking, and Wealth, Brokerage and Retirement. As of December 31, 2009, the Company provided banking, insurance, investments, mortgage and consumer finance from more than 10,000 stores under various types of ownership and leasehold agreements.
Shares of Wells Fargo (NYSE: WFC) traded down 1.59% on Tuesday hitting $27.78 during mid-day trading.
