The swelling national debate over the legality of automated teller machine surcharges raises jurisdictional issues among states, courts, and federal regulators that could take years to sort out -- and could end up in the U.S. Supreme Court, legal experts said Thursday.

An issue that seemed dead just a year ago is resurfacing as a potent force, fueled by consumer anger over being nickel-and-dimed by banks.

Two states -- Connecticut and Iowa -- and two cities in California are battling banks and courts for the right to enforce their bans on ATM surcharges. As they make their cases, a conflict is emerging between national statutes and states' and cities' ability to protect their residents with tougher-than-average laws.

In each of the skirmishes, the banks involved argue that federal regulators have authority over them, pre-empting state laws. The Office of the Comptroller of the Currency said it supports banks' right to charge consumers fees for withdrawing their money from ATMs that are not owned by their banks, and courts have generally upheld OCC rulings of this sort, according to legal experts.

OCC spokesman Robert Garsson said the National Banking Act is the legislation that supports the Comptroller's position. The act, Mr. Garsson said, allows banks to charge fees for services they provide.

Several state legislatures, however, say they have the right to protect their residents if federal law is weak. The states invoke language in the Electronic Funds Transfer Act of 1978, which they say supports their position of authority.

These positions were on display at Monday's hearing on the San Francisco and Santa Monica ATM surcharge bans. Consumer groups that supported the ban told U.S. District Court Judge Vaughn R. Walker that the Electronic Funds Transfer Act should prevail, while lawyers for the California Bankers Association, which has filed a lawsuit against the local ordinances, said it is the OCC's right to pre-empt state law. The OCC has filed an amicus brief on behalf of the bankers.

Judge Walker sided with the banks, saying cities can probably regulate ATM lighting, signage, and design, but "that's a far cry from permitting price regulation -- or, in this case, price prohibition."

Judge Walker issued a temporary restraining order against the ordinances, effectively halting them until both sides can supply more information. But he stopped short of issuing a permanent restraint, which would have obviated the need for a trial based on the bankers' lawsuit.

"The OCC is fighting a turf war," said Janine Benner of California Public Interest Research Group in Los Angeles. Ms. Benner said the ATM surcharge issue may result in a "reining in of the OCC's authority."

In the meantime, there is speculation that this contentious issue may be heard by the Supreme Court. Iowa would be the most likely state to bring the case to the highest court.

Iowa asked the Eighth Circuit Court of Appeals to reconsider its decision on Nov. 5 to allow Bank One Corp. to place ATMs in retail stores in Iowa. Bank One, which does not have branches in the state, would be prohibited from doing so under the challenged law. The idea is to protect Iowa based banks revenue streams. Iowa also has a law, the Iowa Electronic Funds Transfer Act, which prohibits ATM surcharges.

While this law is not the center of Iowa's legal battle, the court decision earlier this month could overturn Iowa's ATM surcharge ban, said Robert Brammer, a spokesman for the attorney general. "The ban on surcharges and other provisions in our act are in peril because of the Eighth Circuit ruling," Mr. Brammer said.

As a result, Iowa said it is considering taking its case to the Supreme Court.

Even if Iowa's case is heard by the Supreme Court, it is unlikely that the court will resolve the issue of ATM surcharge bans, said Lloyd Constantine of Constantine & Partners in New York. Mr. Constantine, former assistant attorney general of antitrust in New York, said, "The Iowa case probably does not accurately predict the outcome of legislation on surcharging."

The Supreme Court hears one out of every 1,000 cases, Mr. Constantine said.

Holli Hart Targan, a former attorney for the OCC who is now in private practice at the Detroit office of the law firm of Jaffe, Raitt, Heuer & Weiss, said, "At this point, at this maturity of the debate, I don't see that the Supreme Court is likely to take it up, and I see that the Comptroller's opinion about this will be upheld, as it is in most instances where pre-emption is an issue."

Ms. Targan said courts give "great discretion" to the OCC's opinion about what nationally chartered banks can do under the National Banking Act. "Unless it's way outside of what would be a reasonable interpretation of the law, the courts are not likely to overturn it," she said. "That said, that's borne out by this controversy, I think."

The Supreme Court would only step in if there were "dissention among the various circuit courts on an issue, and I haven't seen that dissention," Ms. Targan said. Alternatively, the Supreme Court "could decide that what the (lower) courts have done is so unconstitutional that they would take it up on that basis. I don't see that happening either."

But legal experts point out that if Iowa is successful in bringing its case to the highest court, it could set a precedent showing either that states do have powers over national banks, or they do not. In addition, there is the possibility that the cases in California and Connecticut -- which are not as advanced as Iowa and could take years to wend through the courts -- could request a hearing with the Supreme Court.

Alfonse M. D'Amato, the former Republican senator from New York who was chairman of the Senate Banking Committee until last year, had unsuccessfully championed legislation against ATM surcharges until he left office.

Mr. D'Amato said in a telephone interview Thursday: "I predict that someone will bring the issue to the Supreme Court, but if the court even it takes it, it will be another two years." The states, he said, "have a tough case; that's why I proposed legislation."

Ironically, the history of legislation on this issue has been pro-surcharge, and it is state legislatures that helped push for the 1996 rule change by Visa U.S.A. and MasterCard International that opened the door to surcharging nationally.

Nevada was the first state to pass such legislation. Valley Bank of Nevada, which deployed ATMs at Las Vegas casinos, wanted to charge gamblers a fee for the convenience of getting cash. In the early 1990s, the nationwide network Plus, which Visa now owns, prohibited surcharges, so Valley Bank sued them and won.

By 1995 -- a year before Visa and MasterCard changed their national rules -- 15 states permitted surcharging.

David Balto, director for policy in the bureau of competition of the Federal Trade Commission, wrote a 1997 opinion article in American Banker: "15 states arguably helped to create the surcharge problem."

Mr. Balto wrote: "Surcharging may have led to additional ATM deployment, but its impact on consumer convenience is questionable. A great number of consumers probably find their lives less convenient as they search for ATMs that don't surcharge."

Jennifer Kingson Bloom contributed to this article.

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