[Congressional Record Volume 143, Number 19 (Thursday, February 13, 1997)]
[Extensions of Remarks]
[Page E266]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




        INTRODUCTION OF BILL TO BAN ATM SURCHARGE BY ATM OWNERS

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                          HON. BERNARD SANDERS

                               of vermont

                    in the house of representatives

                      Thursday, February 13, 1997

  Mr. SANDERS. Mr. Speaker, I rise today to introduce the Electronic 
Fund Transfer Fees Act of 1997. This legislation addresses the growing 
practice of automated teller machine [ATM] operators assessing a 
surcharge on consumers who use their machines. Specifically, my bill 
prohibits an ATM operator from imposing an additional surcharge on 
customers for accessing their bank accounts through the operator's ATM.
  On April 1, 1996, the national communication networks for ATM's--
Cirrus and Plus--terminated their policy which prohibited ATM owners 
from surcharging consumers for using their machines. As a result of 
this policy change, customers may now be charged twice for accessing 
funds from the customer's own bank account if the customer uses an ATM 
which is not owned by the bank; the first fee is charged by the 
customer's bank for using a nonbank ATM and the second fee is charged 
by the ATM operator.
  At the time of this policy change, experts estimated that within the 
first 18 months, 80 percent of ATM owners would impose a surcharge. In 
actuality only 6 months after the policy change 71 percent of ATM 
owners were assessing surcharges in North Carolina, 69 percent in 
Arizona, 60 percent in Virginia, and 48 percent in Maryland. While the 
nationwide figure has only reached 23 percent a recent study of banking 
practices in Texas indicates that the percentage will continue to grow; 
Texas' largest 10 banks have been allowed to surcharge since 1987 and 
all 10 banks now assess a surcharge for noncustomer ATM withdrawals.
  In practice, banks enjoy tremendous savings by conducting consumer 
transactions through ATM's because ATM transactions are less costly to 
a bank then teller transactions. An ATM withdrawal on a nonowned 
machine may cost a large bank between $.50 and $.60. By contrast, a 
teller transaction with a customer costs the large bank between $.90 
and $1.15. A study by the Consumer Finance Project indicates that in 
1995, banks avoided 2.6 billion teller transactions because consumers 
used ATM's. Because the banks are actually saving money by using ATM's, 
consumer groups view it as extremely unfair to charge a consumer 
multiple fees for withdrawing his/her own funds through ATM's. Consumer 
groups such as U.S. Public Interest Research Group [US PIRG] and the 
Consumer Federation of America support this legislation.
  Mr. Speaker, it is now typical in many parts of the country for a 
consumer to be charged between $1.50 and $2.50 just to access money on 
the consumer's own accounts. Whatever costs may be incurred by a bank 
when a customer uses a nonbank ATM, banks do manage to recover; on 
average, customers pay $1.18 to their bank for the convenience of using 
ATM's which are not owned by the bank.
  I am especially concerned because, unlike the banks that hold our 
accounts, the machine owner has no incentive to keep his/her fees 
reasonable because no relationship exists between the ATM owner and the 
customer. As such, the more remote the ATM machine, the less incentive 
for reasonable fees, and the more captive the bank customer.
  Mr. Speaker, at a time when banks are making record profits and one-
third of those profits--tens of billions of dollars a year--come from 
fees, it is outrageous that these same banks and other ATM owners are 
charging consumers even more to access the consumers' money. We must 
eliminate these additional surcharges and help protect the consumer 
from another needless expense.

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