“ATM surcharges, the fees levied on bank customers using automatic teller machines outside their own bank’s system, are under attack in San Diego.
Last week, following a similar ban on the fees by the city of Santa Monica, the county Board of Supervisors voted to study the feasibility of a ban in a 3-1 vote, with Dianne Jacob opposed and Ron Roberts absent.
Supervisor Pam Slater, who introduced the item, said banks shouldn’t be charging customers fees for what amounts to consumers accessing their money via self-service.
“When you pump your own gas at a self-service station, you’re not charged extra. These ATM fees are a burden on consumers and appear to serve no purpose other than generating easy money for the banks.”
The ATM surcharges can range from $1 to more than $3, and average $1.50 in California. The state’s largest lenders charge a $2 fee to their customers when they use ATMs outside their own networks, said John Stafford, a spokesman for the California Bankers Association.
Surcharges Justified
While these fees may be expensive, Stafford and the banking industry say the surcharges are justified and are simply the cost of providing so many more ATMs around the state.
“The revenue from the ATMs allows banks to expand their ATM networks and expand everybody’s convenience,” Stafford said.
“Plus, nobody’s forcing you to use the machines.”
In California, 75 percent of all ATM transactions have no fee attached, because these are made by customers at their bank’s machines, Stafford said.
In addition, retailers have installed thousands of point-of-sale terminals, allowing consumers to use credit or debit cards to get cash, he said.
“The fees are fully disclosed and consumers vote every day for them by using the machines,” Stafford said.
Yet the argument the banking industry is gouging consumers recently gained a powerful ally when the Defense Department issued a proposal to ban the surcharges at all military bases in the United States and abroad.
A decision on the proposal isn’t expected until the end of this year or early next year, but banks are taking notice.
But if the Pentagon so desired, it could install all its own ATMs on military bases and offer them at no charge, Stafford said.
Limited Ban
Even if supervisors approve the ban, it would only affect ATMs located in the unincorporated areas of the county.
A proposal for a similar ban will be introduced next month in the city of San Diego by Councilman Byron Wear, who called the ban “the most logical idea to pass my desk in a long time.”
“The concept is simple: We are asking that people not be charged twice for using the ATM machine once,” said Wear, who is running for mayor.
Stafford noted Wear’s mayoral aspirations, saying “that speaks for itself.”
While bans on ATM surcharges will certainly generate plenty of populist support, it could also end up costing taxpayers much more in the long run, say the banks.
“We believe we have the right to charge convenience fees for the services we offer, and we believe that right cannot be impaired by local prohibitions, and we will defend this in court if we have to,” said Lisa Margolin-Feher, a spokeswoman for Bank of America.
She said if the Santa Monica ban is officially adopted within the next few weeks, BofA intends to file suit.
Nationally chartered banks such as BofA, Wells Fargo Bank and Union Bank of California are regulated by the federal Office of the Comptroller of the Currency, and their operations cannot be legislated by local municipalities, Stafford said.
Scott Barnett, executive director for the San Diego County Taxpayers Association, called the proposed ban by the county, “an irrational intrusion by the government into the banking industry,” raising concerns about future prohibitions of other industries.
In addition, if adopted, the ban could do the exact opposite of what it is intended, Barnett said.
“In fact, the county possibly will end up spending more taxpayer dollars than you hope to save the consumers by implementing this measure.”
‘When you pump your own gas at a self-service station, you’re not charged extra. These ATM fees are a burden on consumers and appear to serve no purpose other than generating easy money for the banks.’
Supervisor Pam Slater,”
