BankBoston Corp. and Fleet Financial Group have pledged to cap fees at their Massachusetts ATMs at $1 for two years.

The agreement, announced last week, was meant to stave off state legislation to ban surcharges.

The two banks, operators of two-thirds of the automated teller machines in the Boston area, have lobbied steadfastly against such legislation. A bill to outlaw surcharges passed the state Senate 38 to 0 last November and has sat dormant in the House Ways and Means Committee ever since.

BankBoston plans to start surcharging in the fall. It is widely believed that Fleet will start surcharging, but the company has not said it will.

The Massachusetts Bankers Association sponsored the voluntary pledge and is encouraging other banks to sign on. BankBoston and Fleet sent letters about their participation to House leaders, attempting to seal their commitment to a free-market solution.

The voluntary cap would take effect Sept. 15. The banks would disclose the surcharges on ATM screens and waive fees for recipients of welfare and other entitlements through electronic benefits transfer.

The plan closely mirrors one by state Rep. Philip Travis, chairman of the House Banking Committee. Drafted as an alternative to the existing bill, it was never introduced.

The fee-cap agreement "makes a lot of sense," said BankBoston spokesman Bruce Spitzer. "We fully support it and endorse it. It's a sound approach in balancing competitive market principles with the concerns of community banks and individual consumers."

The Massachusetts legislature is due to end its session today.

Deirdre Cummings, consumer program director for the Massachusetts Public Research Interest Group, said the big banks' initiative was an "ingenious PR stunt."

"It's a direct result of the pressure they were feeling of the likelihood of the bill passing," Ms. Cummings said. "What they're offering is not a compromise-what they're offering is what the bill is designed to prevent."

MassPIRG held a news conference last week to encourage a House vote. It put someone in an "ATM bandit" costume to make its point. The consumer group said 91 of 156 House members support the ban. "Consumers are angry, and this bill taps into that," Ms. Cummings said.

Daniel J. Forte, president of the Massachusetts Bankers Association, said the legislature could act later if the $1 cap has an adverse effect on the market.

"Clearly we and the members didn't want to advocate a legislative ban on pricing of services," Mr. Forte said. "But we also wanted to have a rational approach of phasing in this pricing paradigm."

The banks' move to preempt the legislature has the blessing of Rep. Travis. "The consumer will benefit in the long run," he said.

Sen. Alfonse D'Amato, R-N.Y., chairman of the U.S. Senate Banking Committee, has promised to attach an antisurcharge provision to federal appropriations bills in the fall.

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