Sen. Tom Harkin has dropped plans to impose a 50-cent cap on automated teller machine surcharges, the National Association of ATM ISOs and Operators reported Wednesday.

The Iowa Democrat instead inserted language in a proposed amendment that ATM independent sales organizations could charge a reasonable surcharge fee based on the amount of the cardholder's cash withdrawal. The Federal Trade Commission would determine surcharge amounts, according to the ISO trade group, which opposes the compromise language.

On Tuesday night the Senate declined to vote on the Harkin amendment.

The average surcharge fee for a teller machine is $2.22, according to a survey that conducted last fall. Most ATM owners, however, charge $2 to $3 per cash withdrawal.

Surcharge fees led to the creation of the off-premise ATM industry in April 1996, when MasterCard Inc.'s Cirrus and Visa Inc.'s Plus networks dropped opposition to surcharging, said Leon Majors, the president of the payments systems practice at Phoenix Marketing International.