The four largest banks in Washington State would be barred from imposing automated teller machine surcharges on noncustomers until July 1, 1998, under legislation pending in the state Senate.

The bill, drafted by John L. Bley, director of Financial Institutions, would prohibit a bank from charging the fees if it has assets greater than $1 billion and its share of Washington's ATM market exceeds its portion of insured deposits. The legislation would affect Seafirst Bank, U.S. Bank of Washington, Key Bank of Washington, and Wells Fargo Bank.

Surcharges are a "threat to the deposit base of small and moderately sized depository institutions," Mr. Bley charged in a memo to lawmakers.

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