Electronic-Age Banking

IT'S a familiar scene: You're traveling and need cash. You look for an automated teller machine, resigned to the fact that you'll pay a fee to your bank at home for having used a "foreign" ATM (a machine owned by another bank). What you might not know is that now you could be hit twice: by your bank and a surcharge by the bank that owns the machine.

Banks lobbied Visa International, which sets rules for ATMs, to lift its ban on surcharges, and this month it did. According to some estimates, the new surcharges could double the average yearly fees ATM-users pay.

Increasingly, customers are feeling trapped: They're being urged to rely on ATMs and yet may be penalized for doing so. In New York, Citibank is converting 26 fully staffed banks to "all- electronic" branches. A study by Deloitte & Touche estimates that half of all bank branches will close within 10 years. Though there will be more ATMs as a result, under the new rules customers will have to take care to use only their own bank's machines.

If more banks go electronic to save money, they should offer customers an incentive beyond convenience. Keycorp, for example, is considering paying people 15 or 25 cents per transaction to make deposits electronically.

Now Congress is getting involved. Rep. Charles Schumer (D) of New York is promoting a bill that would require banks to program their machines to tell customers they're being charged a fee. Rep. Bernard Sanders (I) of Vermont has introduced legislation prohibiting ATM owners from imposing the new surcharge at all.

We don't like these fees, but it's too early for Congress to stick its nose in. It would be better to wait and see how the public reacts. We suspect banks that keep fees low will find customers heading their way. The others will get the message.