A BACKLASH BUILDS AGAINST BANKS' NEW ATM FEE-FOR-ALL
(MONEY Magazine) – In December, MONEY reported on an alarming trend: bankers charging so-called convenience fees of 50 to $2 to other banks' customers who withdraw money from their ATMs. Since our article, even more banks have piled on--but the bad news may spark some relief. Several prominent politicians are now talking openly about possibly eliminating the levies.
The U.S. Public Interest Research Group, a Washington, D.C.-based consumer advocacy organization, estimates that more than 40% of ATM operators impose surcharges, up from 23% just six months ago. Among the latest banks to jump into the fee-for-all: Fleet Financial Group (which operates 2,000 ATMs and nicks noncustomers $1 per withdrawal) and U.S. Bancorp (1,250 machines; $1.50). And of course, those fees come on top of whatever your own bank collects for ATM transactions.
Sen. Alfonse D'Amato (R-N.Y.) is one of the backlash leaders. He has asked the General Accounting Office--the research arm of Congress--to investigate ATM fees. D'Amato hopes the GAO's findings will provide fresh ammunition he can use after he reintroduces his antisurcharge legislation, most likely this spring. "Originally, banks said that ATMs would cut their costs and let them pass savings on to consumers," says the senator. "Instead, they've begun double-charging us." Lawmakers in at least six states--California, Connecticut, Massachusetts, New York, Oklahoma and Pennsylvania--have also proposed legislation to outlaw ATM surcharges.
Consumer advocates warn that big banks will lobby hard to preserve the fees. "Pressure is building," says Don Davis, editor of Bank Network News, an industry newsletter that covers ATMs. If you have an opinion on these fees, write to your representatives in Washington, D.C. and in your state. In the meantime, you might also want to try to duck the charges by choosing a local bank that has a wide ATM network of its own.