ATM Fee Opponents Open New Line of Attack
Jul. 11, 1996
WASHINGTON (AP) _ Opponents began another attack on new bank ATM fees Thursday, arguing the fees could cause consumers to leave small community banks and drive small bankers out of business.
Paul Green, a Boston-area banker representing the Community Bank League of New England, said he fears his customers will flee to large banks with big networks of the cash machines to avoid the new surcharges.
``This is not about reimbursement fees for the ATMs. It's about absorbing new marketshare and penalizing the customer for being with another bank,'' said Green, president of the Massachusetts Cooperative Bank of Dorchester. ``We are very concerned about our survivability.''
Green testified at a Senate Banking Committee hearing on a bill sponsored by the panel's chairman, Sen. Alfonse D'Amato, R-N.Y. The bill would prevent banks from charging customers twice for using a cash machine that is not owned by the consumer's bank.
A similar bill sponsored by Rep. Bernie Sanders, I-Vt., is pending in the House, but neither proposal has been scheduled for a committee vote.
In April, major ATM networks agreed to permit banks to collect an ATM surcharge to recoup their investment in the machines and their operation. The surcharge, typically $1, is in addition to an interchange fee, which ATM networks charge banks for using their computer lines.
D'Amato's bill would prohibit the surcharge, but not the interchange fee.
``Surcharging is not only anti-consumer, it also may be anti-competitive and harmful to small financial institutions,'' he said.
Small banks and credit unions can't afford the machines, which can cost more than $200,000, so their customers instead access their accounts through other banks' cash machines, using the national ATM networks such as Plus and Cirrus.
The ATM networks have denied charges that the fees undercut small banks. Phillip Hudson, a Utah banker representing the American Bankers Association, argued the ATM machine is a valuable service provided by banks.
``It is perfectly reasonable for owners of these machines to charge for their use if they so choose,'' Hudson said in prepared remarks. He said the banks are required to disclose surcharges and consumers can choose not to use the machine, opting to deal with a human teller instead.