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Friday, Feb 23, 2024

Just Say No to the ATM Fee Ban

It has often been said, “You can’t legislate morality and you can’t legislate intelligence.”

No one seems to remember who first said it, but as profound as the quip may be, it is also half wrong. When you think about it, every new law and proposed piece of legislation amounts to someone’s idea of morality, and intelligent or not, government continues to pass new laws.

One of the latest efforts is based on the belief that it is immoral for banks to charge users a fee for obtaining cash from an ATM machine. People are hopping mad, the proponents say, so government better do something about it.

To prove the point that banks are stealing from ATM users, a Downtown San Diego press conference was recently held, where a rapt media contingent saw first-hand the hard lessons of these electronic robber barons. While attempting to withdraw $20 from a Bank of America machine, the requestor was faced with the programmed message that he would also incur a $1.50 transaction fee, since he was not a BofA customer. He declined.

Whether this means he went without lunch is unclear, but not only is it certain that he declined, most importantly, he chose to decline. The machine was even nice enough to warn him of the potential charge so as to assist him with an even more intelligent decision. Life is full of choices, we are told, and most of them we still make on a daily basis without government help, or even a government mandate.

When that choice involves a transactional relationship between a potential customer and a business providing a product or service, its up to the business to set the price and the customer to say yes or no, or even to take their business elsewhere. A free market, it used to be called, rooted in the basic economic principles of supply and demand, and studied in Economics 101. So, when did government become the uninvited third party in the relationship?

City, County Proposals

Both the city and county of San Diego are considering ordinances that will legislate away ATM fees. Other cities may follow. If successful in the endeavor, those jurisdictions will also be legislating away the competitive edge enjoyed by those banks and cash machines that have lower or no fees. Let’s just force all providers to operate at the same level and at the same price. While we’re at it, let’s make all service stations sell gas at the same price as well; after all, we’re all mad about gas prices, too.

Wasn’t this kind of thinking once called price controls?

User fees are commonly applied as a way to provide an increased level of service, while only charging those actually benefiting. Additionally, these fees are a way to recoup the capital investment and ongoing support and maintenance costs of the provided service.

In fact, user fees are very common in government, of all places. Every local municipal agency in San Diego County utilizes such fees, including those studying a ban on ATM fees. Building permits, recreation classes, campground usage, and business licenses are a few examples on an extensive government menu, paid for by only those partaking of each particular service. In many cases, water and sewer usage, as well as trash pick up, are charged as user fees by local government.

Just to make sure we’re all on the same page, then, it’s OK for government to charge these fees, but not for the private sector, right? As rhetorical as that question may be, it is probably just as unfair, as there is a definite difference between the two kinds of fees.

A Matter Of Choice

In the private sector, you can usually take your business someplace else, just like you can go to a different cash machine, or , imagine this , not use an ATM at all. However, in the case of most government programs, you have no choice. So, the real question may not be what we did before ATMs, but what we did before government.

In all seriousness, proponents of the ban on fees point out that existing federal regulations on cash machines allow local governments to enact such legislation. Yes, there are a lot of things that government can do, but shouldn’t, while the list of things it keeps its nose out of gets shorter by the day.

Also argued is that the true unfairness in ATMs is not the fee itself, but the inequity in the fee being charged to noncustomers only, while actual customers go scot-free. It is, however, a common business practice to offer added benefits to those who already pay for a service, or even those who are just regular customers. Kind of like those evil grocery store discount cards, frequent-flier programs, and health club memberships.

So, can you legislate intelligence? Well, from a personal standpoint, I, too, have been annoyed when I’ve needed some quick cash, and it’s cost me up to another 10 percent just to get my very own money. Sure, I could go to cheaper cash machine, I could go to my own ATM, or I could even get my life planned enough in advance to get to the bank. Heck, I could just say no.

But, if I’m not smart enough to realize I have the choice, maybe I do need the government to be my nanny.

Jantz is a member of the La Mesa City Council and

president of Jantz Communications, a public affairs firm.


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