Imagine stopping at the ATM at your local gas station late at night to get $20 to pick up diapers or milk and being hit by an extra charge of $3.90 because you're not at your local bank. This is not a fantasy. According to the Arizona Republic, that's what Tidel, a financial group, charges customers for using its ATM at a gas station in Rock Springs, Arizona.
Two years ago, the major ATM networks agreed to let banks charge outside users an extra fee for using their automated teller machines. Since then, such surcharges have exploded across the country. While it costs banks just 25 cents to process ATM transactions, the average surcharge is $1.27.
According to a study by the U.S. Public Interest Research Group, the average person will pay an extra $155 per year for the convenience of drawing funds from ATM machines. And it's not as if these surcharges are easy to avoid. In Arizona, for example, nearly seven in ten ATM machines charge consumers a fee for cash withdrawals.
Thus it's no surprise that more than 80 percent of the public favors legislation that would stop this practice of double-charging consumers and force banks to disclose ATM charges on all their teller machines. The bankers say this would lead them to close many ATMs, but no such shutdowns have taken place in states like Connecticut and Iowa, which have banned ATM surcharges.
Another no-brainer for members of Congress? Not when individuals and PACs connected to the banking and thrift industry pour millions of dollars each year into their campaign coffers. On September 17, the full Senate voted down an amendment sponsored by Al D'Amato (R-NY) that would that would bar banks from charging a non-customer for use of their ATMs. It was rejected by a vote of 72-26. All of the top ten recipients of banking and thrift contributions--except for D'Amato, who is a close ally of the banks on most issues but is eager to win consumer approval since he is in a close re-election fight this year--voted against the amendment.
If you leave out contributions to D'Amato, the Senators supporting restrictions on ATM fees have received on average over the last five years just $63,000 from the banks and thrifts--compared to an average of $100,000 contributed to each Senator who voted to allow double-charging to continue. Banks profit to the tune of $1.9 billion a year from these exorbitant fees--not a bad investment in a Congress for sale.
