Senate Banking Committee Chairman Alfonse M. D'Amato plans to investigate whether automated teller machine networks are illegal monopolies, a top aide said Friday.

The New York Republican also plans to study whether interchange fees are still necessary, according to Peggy Kuhn, a financial economist on the senator's staff.

Sen. D'Amato may also carve out an exemption to the antitrust laws for banks that want to enter voluntary agreements to waive ATM surcharges for each other's customers, she said. Finally, the senator has asked the General Accounting Office to update its 1997 report on the number of banks levying surcharges, Ms. Kuhn said at an American Bar Association conference.

"There is more to this issue than convenience or attempts at price fixing," she said. "We are concerned about the cost of accessing the payments system."

Ms. Kuhn warned that surcharges-fees noncustomers are charged for using a bank's ATMs-give big banks too much leverage over customers. "We have a case of perverse price competition," she said. "You can actually gain customers by raising prices. That isn't a free market."

But Stan Paur, president and chief executive officer of the Pulse EFT Association, argued that consumers may avoid these fees by using their own bank's ATMs or point of sale terminals. "We believe that based on free markets and facts, laws are unwarranted," he said. "It will stifle free enterprise and freedom of choice."

Mr. Paur noted that 28% of Pulse cardholders pay 72% of all surcharges, suggesting that most of the fees are paid by a small number of convenience users. Also, he said a recent poll found less than 2% of consumers have switched banks because of surcharges.

"Consumers have not and are not leaving their institutions because of these fees," he said.

Lendell Porterfield, a financial economist for Sen. Richard C. Shelby, R-Ala., warned that it would be almost impossible to rescind a surcharge ban.

"Look how hard it is to repeal" the Glass-Steagall Act, Mr. Porterfield said. "The last thing we want is the same thing to happen to this."

Sen. D'Amato on Wednesday vowed to attach a ban on ATM surcharges to a piece of must-pass legislation this year.

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