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Congress takes aim at ATM double banking fees
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July 12, 1996: 8:57 p.m. ET
D'Amato wants to ban charges
From Correspondent Kelli Arena
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WASHINGTON (CNNfn) - Congress took aim at a new target Thursday: banks. Senate Banking Chairman Alfonse D'Amato (R-N.Y.) held a hearing on legislation that would prohibit banks from charging fees to consumers who use automatic teller machines.
Those fees have been a popular subject of discussion recently because many in Congress, as well as consumer advocates, say banks should not be allowed to impose extra charges for using ATMs in addition to the monthly fees charged for various accounts.
One thing's for certain, say consumer advocates: when it comes to ATMs, it's consumer beware. Many consumers are unaware that they can be charged twice for the same ATM transaction.
One fee is imposed by their bank, while the operator of the ATM network often imposes another.
"If the consumer knew how expense it was, the consumer wouldn't use these machines. And what really bothers me is that banks try to get away with as little disclosure as possible," said Rep. Charles Schumer, a New York Democrat.
Shumer has introduced a bill requiring banks to disclose all fees, but it would still allow surcharges. Consumer groups maintain the surcharges are at the root of the problem.
Consumer groups maintain the fees are unfair because ATM transactions cost banks less money than those conducted using tellers.
"You need to go to ATM machines because banks have fewer branches, fewer tellers and shorter hours. On the one hand, some banks charge you to go to the teller. On the other hand, the other bank charges you to go to the machine. You can't win," said Ed Mierzwinski of the U.S. Public Interest Research Group.
D'Amato agrees that consumers are being held hostage on the issue. He is pushing for a ban on surcharges, which currently average about $1 each transaction. "Working, middle-class families are going to pay hundreds of millions of dollars -- in some cases $15 or $20 more a month -- to the bank that is already charging them," he said.
Banks, meanwhile, say they don't make money running ATMs. They say just because surcharges are allowed doesn't mean every bank will take advantage of them.
"We've got test cases where access fees have been allowed and every bank isn't charging. Every ATM isn't charging an access fee," said Phil Hudson of the American Bankers Association.
ATM's do help banks in one big way: it costs less for banks to complete routine transactions. On the average, ATMs cost banks about 27 cents a transaction, while tellers cost more than $1. Many customers say it's time the consumers share in those savings. 
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