The ATM Industry Association and vault-cash provider Cash Connect are urging automated teller machine operators to lobby against legislation that would limit ATM surcharges.

"The U.S. Senate is considering a measure that would cap ATM surcharge fees at 50 cents," John Clatworthy, Cash Connect's senior vice president of client services, wrote in a letter sent Thursday to ATM vendors, merchants and other companies. "The measures would be devastating to the ATM industry," and the U.S. economy. Cash Connect is a Newark, Del., unit of Wilmington Savings Fund Society.

Sen. Tom Harkin, D-Iowa, has sponsored an amendment to the financial regulatory reform bill that would require a proposed Consumer Financial Protection Bureau to ensure that ATM fees are reasonably related to the costs of processing the transactions.

The ATM association has set up an online petition opposing the proposal; it attracted 1,800 signatures within 48 hours after posting, said Mike Lee, the trade group's chief executive.

ATM company executives say Harkin's proposal is based on calculations the Office of Thrift Supervision made in 1997 that put pretransaction ATM costs at 27 cents; allowing for inflation, that would be 36 cents today.

However, Clatworthy cited a 2006 study of ATM deployers, published by First Data Corp.'s Star debit network, which said that banks and independent sales organizations pay an average of $1,450 per month to deploy an off-premise ATM and the machines average total surcharge and interchange revenue of $1,013.

If approved, the amendment would reduce the number off-premise ATMs by tens of thousands, Clatworthy said.

The legislation also would affect small businesses, he said. "Thousands of small businesses, such as gas stations, convenience stores and independent ATM operators, rely on surcharge revenue to stay in business and create jobs."