Roughly 65% of small banks charge noncustomers to use automated teller machines, up from 39% a year ago, according to a report issued Wednesday.

The third annual ATM study conducted by U.S. Public Interest Research Group, a consumer watchdog, also showed 83% of the 300 largest banks impose ATM surcharges, up from 51% in 1997.

And large banks charge more-an average of $1.35 per transaction compared to $1.16 for small banks and $1.04 for credit unions.

Of the 480 banks surveyed, 71% said they impose ATM fees, ranging from 25 cents to $2.50 per transaction. That was a 58% increase from a year ago, when 45% reported charging ATM fees.

The report, "Big Banks, Bigger ATM Fees," was released two years to the day after the nation's largest ATM networks ended their surcharge bans. On April 1, 1996, Plus and Cirrus began allowing ATM owners to charge noncustomers for using their machines.

Ed Mierzwinski, consumer program director for the group, called on Congress to take quick action to prevent banks from "picking consumer pockets. We are disturbed that the number of banks surcharging is going up and Congress hasn't acted," he said.

But banking industry representatives said consumers, not the government, should decide the future of ATM surcharges.

Consumers have shown that they do not mind paying for the "convenience of using ATMs in thousands of new locations," said Donald G. Ogilvie, executive director of the American Bankers Association. "Placement of these ATMs has been in remote locations that previously had no ATM access."

Legislation to eliminate ATM surcharges has been introduced in Congress and at least 25 states. Federal legislation is not expected to pass, and anti-surcharge bills have been defeated in 10 states, according to Mathew Street, the ABA's associate general counsel for state issues.

No state has approved legislation to ban ATM fees. A bill to do so was unanimously approved by the Massachusetts Senate but has yet to be voted on in the state House.

The 480 banks surveyed are located in 28 states and the District of Columbia. Forty-six credit unions were surveyed.

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