Are you ticked off every time you have to pay double fees to withdraw money from an automated teller machine?
Consumer groups have been yelling about the issue for months. It has also gained visibility on Capitol Hill - from both sides of the aisle.
Now Sen. Alfonse D'Amato (R) of New York, chairman of the Senate Banking Committee, has asked the General Accounting Office to study what he terms "unfair" ATM surcharging.
Like Rep. Bernard Sanders (Ind.) of Vermont, Senator D'Amato introduced a bill last year to ban the double charging, or surcharges, but it never left committee. Now he's turning to Congress's investigating arm to study the issue. In a letter to the GAO, he asked it to determine the extent of ATM surcharges and how much consumers are paying.
"We would welcome a study," says Fritz Elmendorf of the Consumer Bankers' Association, which represents about 700 large banks nationwide. "But we oppose legislation that would keep the market from sorting this out."
ATM users have long paid fees - usually about $1 - for using ATMs at banks other than their own. That's because your bank passes on to you a "foreign transaction" fee that the other bank charges it when you use the other bank's machine.
Beginning last April, however, the national networks that link ATMs - Visa's Plus and Master Card's Cirrus - began allowing the bank owning the ATM to tack on an additional "surcharge" of $1 or $1.50 when noncustomers use its machines. That means consumers in some cities can now pay as much as $2.50 for an ATM withdrawal from a bank other than their own.
The second fee is what bothers the senator. "Customers already pay a fee to use an ATM. Why should they pay twice for the same transaction?" D'Amato asked in a statement announcing the study request. "Technological advances are supposed to lower costs and increase convenience, not serve as vehicles to gouge customers." D'Amato estimates that the average New Yorker pays up to $300 a year in surcharges.
Bankers see the issue as one of convenience. They want to place the ATMs where people will find them useful, but at the same time, the machines come at a cost: $50,000 apiece and $30,000 a year to maintain. ATMs make money with a high number of transactions, Mr. Elmendorf says. If a machine is in a sports stadium or a national park, which are convenient but not high-volume areas, the new surcharge allows a bank to justify the cost of having a machine there.
"The consumer has a choice of using [another bank's] ATMs or not. If they want cash, they can make the decision whether it's worth an extra buck to get the extra cash. The fees are clearly disclosed," he says. "Nobody likes paying fees, but nobody likes being caught without cash, either."
A few states, such as Texas, Georgia, Utah, and Nevada, have permitted surcharges for as many as seven years, says John Hall of the American Bankers' Association, the largest industry group. In those states, he says, "the number of ATMs has gone up exponentially." Some consumer groups have show that banks save by using ATMs instead of tellers, but Mr. Hall asserts that the two types of transaction "are not the same. We all go to ATMs much more often than we ever went to tellers. And while there are 10 percent fewer tellers, there are 100 percent more ATMs."
Elmendorf says most of his association's member banks do not charge the extra fee. And some regional networks, notably in Chicago and Michigan, still do not permit the surcharges, he says.
D'Amato is not convinced. "For 10 years, banks have been steering the American consumer toward ATMs," says the three-term senator, who faces a tough election fight in 1998. "Now the banks claim they cannot afford to operate ATMs without double-charging the customer. That's wrong."
D'Amato spokesman Richard Mills says his boss hasn't indicated whether he will introduce a new bill to ban the practice, "but I can tell you we'll be taking [the issue] up next year."