WASHINGTON - While technically possible, requiring more automated teller machine fee disclosures could cost as much as the estimated $10 billion financial companies spent on the Y2K computer update, according to a report released Tuesday by the General Accounting Office.

In the Gramm-Leach-Bliley Act of 1999, lawmakers asked the GAO, Congress' auditing arm, to find out whether real-time disclosure of all ATM fees would be possible. If so, Congress requested a cost estimate and a time frame for executing needed changes.

The auditing office concluded that real-time disclosure would require "extensive restructuring by the ATM industry." While the 36-page report makes no recommendations and does not pinpoint costs or timing, it does question whether the benefits gained through added disclosure would outweigh the costs.

"Consumer benefits could be partially offset by increased fees, inconvenience, and/or reduced account options," according to the report.

Gramm-Leach-Bliley codified the standard business practice of disclosing the surcharge imposed on consumers who use a machine that is not owned by their bank. But during debate of the financial reform law, some lawmakers also wanted to require ATM operators to disclose the fee a customer's own bank charges for using other banks' machines. Congress settled on asking the GAO to study "foreign fee disclosure."

The cost of changing systems to make these disclosures possible could lead to higher fees, longer transaction processing times, fewer cash machines, and a narrower range of banking accounts, the GAO said.

Existing systems would have to be equipped to obtain fee information from the cardholder's bank, display that fee to the cardholder, allow the cardholder to accept or reject the fee, and transmit that decision to the bank to finish the transaction.

Just finding out what fee to charge "could double the network traffic required to perform most transactions," the auditing agency said. It would also add 11 to 17 seconds to the basic 23-to-33-second cash transaction, the report said.

The report, originally due May 12, also said few customers complain about ATM fees. Last year there were 31 such complaints and 11 billion ATM transactions.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.