The ATM Industry Association has decided to petition against the Harkin Amendment for an ATM fee cap.
Harkin's amendment would require the new Consumer Financial Protection Bureau to ensure that fees charged to consumers at ATMs bear a "reasonable relation" to the cost of processing the [image-nocss] transaction. The cost of processing a transaction is no more than 36 cents today, according to Harkin. For this reason, the amendment also sets a "reasonable upper limit" of 50 cents per transaction.
"In recent years, Congress has acted to protect consumers by setting appropriate limits on the types of fees that financial institutions can charge consumers; however, one area that lacks these sensible restrictions is the fees charged to consumers for using [ATMs]. Consumers are being charged ATM fees that are well in excess of the cost of providing services, in some instances, as much as $5 per withdrawal. These fees are outrageous, are anti-consumer, and they need to be reigned in," said Harkin.
"Under the current structure, banks charge consumers fees for using ATMs while also collecting fees from other banks. This amendment restricts the double-dipping that benefits banks and costs consumers," said Harkin. "Our mission in financial reform is to level the playing field for the average Joe. My amendment goes to the heart of that mission, ensuring consumers are no longer victimized by unfair fees."
Prior to 1996, some card networks actually prohibited financial institutions from charging consumers a fee for using an ATM. Instead, the costs associated with ATM transactions were paid between banks and the processing networks; however, those restrictions were removed in 1996, and the Federal Reserve now estimates that nationwide, consumers pay an average of $2.66 to use ATMs.
Here is the full text of the ATM Industry Association petition:
We, the undersigned, oppose Senate amendment (SA 3812) introduced by Sen. Harkin (D. Iowa) and Sen. Schumer (D. NY) to require ATM operators to limit their surcharge fees to no more than [50 cents].
Since ATM operators were permitted to assess ATM fees in the mid-90's, the number of ATMs has more than tripled to more than 425,000. This growth has been in direct response to consumers demanding convenience access to their bank accounts. Over 290,000 of these ATMs are located not on bank premises, but at retail stores, hotels, airports, entertainment venues, etc.
The growth of the ATM industry and the thousands of jobs created by it has been made possible by the ability of ATM operators (banks and non-banks) to use the competitive market place to set their ATM fees-rather than government fiat. If the SA 3812 passes, the number of off-premise ATM industry would be reduced significantly, with a corresponding reduction in the number of Americans employed in the ATM industry. Today in America, no consumer goods are subject to government price controls. A consumer's use of an ATM should not be the sole exception.
We urge the Senate Committee on Banking, Housing& Urban Affairs to reject SA 3812.
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