To the Editor:

The In Focus column of July 1, "Election Year Politics At Root of Capital Push To Restrict ATM Fees," seems to say the Independent Bankers Association of America favors ATM pricing legislation and has taken a position against surcharging. Neither is the case.

We do not believe legislation affecting automated teller machine pricing is needed or desirable. Rather, we favor an orderly migration to a fair and equitable ATM retail pricing structure.

Likewise, we believe that if allowed to evolve naturally, market-based pricing will produce reasonable access fees, more ATM locations, and enhanced features and functions for consumers.

In a survey of members prior to taking our position, the majority of banks supported the option to surcharge, provided it is done under fair and competitive conditions. Community banks favor an orderly progression toward a surcharging system and are concerned that any ATM pricing legislation will disrupt this process, cause abrupt change, and further impede competition.

However, the IBAA will not stand idly by if the large-bank ATM deployers place small banks in jeopardy by dealing in unfair policies and discriminatory pricing. As a result, the IBAA position supporting surcharging is conditional on the adoption of industry standards that: (1) allow ATM owners the choice to collect either a surcharge or an interchange fee from the ATM user, but not both on the same transaction; (2) compensate ATM-card issuers for the costs they incur to support surcharging and give them incentives to continue promoting bank-owned ATM brands; and (3) create an exemption from sub-switching prohibitions for smaller institutions so they can protect and defend market share on at least some semblance of an equitable basis.

If adopted, these standards will help balance the equation between ATM owner and ATM card issuer and preserve competition among small and large network members in a pro-surcharging environment, making legislative intervention unnecessary. More importantly, they will allow this new pricing structure to deliver on its much heralded promises of increased competition, enhanced services for consumers, and fairer returns for banks on their ATM investments.

If, on the other hand, the industry is not successful in building a level playing field, these obstacles to competition will ultimately raise antitrust issues, generate consumer backlash, and most assuredly invite unwanted legislation.

Lee Stenehjem Jr.

President, Independent Bankers Association of America Washington

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