While the recent outbreak of opposition to automated teller machine surcharges is familiar enough to industry observers, the stakes are much higher this time around because so many banks, thrifts and credit unions have come to rely on the fees.

Several recent surveys - including ones by the U.S. Public Interest Research Group, the Credit Union National Association, and American Banker - show that surcharging has become more the norm than the exception since 1996, when Visa U.S.A. and MasterCard International first formally permitted the practice. The surveys also revealed other details of surcharging by financial institutions.

On Nov. 9, the Credit Union National Association and the Consumer Federation of America released a joint study on various fees for banking services.

The study found that four out of five banks surcharge noncustomers, versus one in five credit unions.

The survey, based on a 1998 poll of 922 credit unions and 82 banks, also found that credit unions surcharge an average of 23 cents, versus 97 cents for banks. The data include banks and credit unions that do not surcharge.

Daniel A. Mica, president and chief executive officer of the Washington-based Credit Union National Association, said that credit unions are always trying to make consumers aware of the differences between their institutions and banks, and that anti-surcharge sentiment helps their promotional efforts.

"You'll get no tears from me on banks not making enough money," Mr. Mica said. "They have been riding a wave of profits, and they have been doing extremely well on fees."

Because credit unions are member-owned, they want to charge either "no cost or the lowest possible costs," Mr. Mica said.

A survey conducted by American Banker confirms that the practice of surcharging has become well entrenched throughout the industry. The survey also revealed that thrifts and credit unions charge lower fees than banks to noncustomers who use their automated teller machines.

As of June 30, the average ATM surcharge among the 50 largest bank deployers was $1.60, versus $1.25 among the top 10 thrifts and 83 cents among the three largest credit unions, according to preliminary results of the American Banker poll. Full findings will be released Dec. 6.

The average surcharge among a sample of large nonbank ATM deployers - including Electronic Data Systems Corp. of Plano, Tex., and Momentum Cash Systems of Houston - was $1.58, nearly the same as that of the banks.

Although American Banker surveys the top bank deployers of ATMs each year, this was the first year companies were asked whether they surcharge.

In addition, the American Banker survey shows that some banks are also charging ATM fees to certain of their own customers, mainly to people who do not maintain required balance levels. These banks are a small minority but include Bank One Corp., Hibernia Corp., and Chase Manhattan.

Among companies charging ATM fees to noncustomers, Hibernia, of New Orleans, and PNC Bank Corp. of Pittsburgh had the highest - up to $3. Most banks said they charged $1.50.

A separate national survey, released in March by the U.S. Public Interest Research Group in Washington, also found that surcharging is on the rise across the board. Among credit unions that the group polled this year, 42% imposed surcharges, up from 13% in 1998. Among the 300 largest banks, the figure rose to 95%, from 83%, according to the study.

Moreover, the growing presence of ATMs that are not owned by banks - and which always surcharge users - has gotten consumers more accustomed to the idea that they must pay a price for the convenience of getting cash elsewhere than at their banks, industry experts say. In the most places where surcharge battles are being fought - including San Francisco; Santa Monica, Calif.; and Iowa - nobody is challenging the right of nonbank ATM owners to make a profit by charging people for cash access services.

Nevertheless, it is not the prevalence of ATM fees that will make them difficult to abolish, but the support they enjoy from the banking industry's top regulatory body, legal experts say. The Office of the Comptroller of the Currency has taken the position that banks are entitled to charge reasonable fees for the deposit access services they offer, and courts have been reluctant to challenge that stance.

ATM fees - along with the accompanying consumer backlash - seem to be spreading to other countries. In Great Britain, Barclays Bank PLC has recently started imposing a charge, following the example of Abbey National PLC and Halifax PLC. A London newspaper, The Independent, predicts: "If these banks succeed in making the charges stick, other banks will follow."

Even among small banks, which have historically been disdainful of surcharges - and have tried to avoid charging them - the practice is spreading. Viveca Ware, director of payment systems for the Independent Community Bankers of America, said about 60% of ICBA's 5,500 banks and thrifts surcharge, and she expects that number to continue to increase.

"The majority of small banks that do assess the surcharges are primarily doing so to offset fees," she said. "A number of them are telling me they're still not making a profit, and sometimes they're not breaking even."

Some smaller institutions have been fighting the surcharge trend. Banks in various geographic pockets have banded together in what have come to be known as "selective surcharge alliances," in which member banks agree not to surcharge customers of members. Customers of banks that do not belong to the alliance are charged fees.

Daniel J. Forte, president of the Massachusetts Bankers Association, said the success of selective surcharge alliances like Massachusetts' SUM shows that the "free market does work." He said SUM and similar programs allow consumers to make decisions without "artificial legislative intrusion into the pricing of bank products and services."

On Monday, Boston-based Citizens Bank of Massachusetts announced that it become the largest member of SUM, adding 255 surcharge-free ATMs to the alliance, which has about 1,500. After the completion of its planned acquisition of UST Corp. of Boston, Citizens will have more than 470 ATMs in the alliance.

A spokeswoman for Citizens said the decision was not related to recent surcharge bans approved in Santa Monica and San Francisco. UST Corp.'s USTrust subsidiary does not surcharge noncustomers, she said, and Citizens Bank has been studying whether to embrace the practice for some time.

Steven Karp, senior associate at First Annapolis Consulting in Linthicum, Md., said pricing is driven by location as well as local competition. ATMs in malls, for instance, always have higher surcharges because consumers have no other choice. In general, however, $1.50 - the most popular rate among top banks - is the "rate at which consumers have demonstrated they won't change their behavior in any material way."

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