Though hailed as a major legal victory for the Office of the Comptroller of the Currency, a recent federal court ruling in Connecticut left national banks in the dark on ATM fees.
The narrow April 7 ruling addressed only whether state regulators had the authority to enforce a Connecticut prohibition on banks' charging noncustomers for ATM transactions. U.S. District Court Judge Janet Bond Arterton said the state could not force national banks to observe the ban.
So a central question remains: Are national banks in Connecticut allowed to impose automated teller machine surcharges?
Having argued for the right to enforce the law, the Comptroller's Office will not say whether it will do so.
"We have not been at a point in the process where we felt that this was an issue we needed to address," was all OCC Chief Counsel Julie L. Williams was willing to say on the subject.
That frustrates state officials.
"If (the OCC) takes the position that it has the power and then fails to exercise that power, it leaves a vacuum that can't help but create confusion, conflict, and consternation and really serves nobody's interest," state Attorney General Richard Blumenthal said.
Connecticut is a central battleground in the war over ATM fees. Bankers say the fees cover the cost of providing convenient access to money, but consumer groups argue that institutions are double-charging for ATM use.
Only one other state, Iowa, has outlawed the fees, but the issue has been pushed-and defeated-in other states, including Massachusetts last year. Congress has even flirted with a federal ban.
The court decision in Connecticut-which Comptroller John D. Hawke Jr. declared in a recent speech to be a major victory-has left national banks confused.
"Most of them are just as bewildered as anything else, because it didn't really solve anything," said Gerald Noonan, president of the Connecticut Bankers Association. "It would be helpful if (the OCC) came out clearly and stated their position."
The banks involved in the lawsuit, Fleet Bank and First Union National Bank, have not begun surcharging noncustomers. Spokesmen for both banks refused to comment on the pending case.
This month's ruling is just a small piece of a case in which the banks claim the surcharge ban is illegal. In addition, Connecticut is appealing Judge Arterton's decision and has filed a separate suit in state court to reverse it.
Michael F. Crotty, deputy general counsel for litigation at the American Bankers Association, said any moves now by the Comptroller's Office could jeopardize that lawsuit.
If the Comptroller's Office decided to preempt the Connecticut law and allow national banks there to surcharge, it would be acknowledging that the ban is legal, Mr. Crotty said.
The Connecticut ban is based on Banking Commissioner John P. Burke's interpretation of a 1976 law that outlines the services for which banks may charge fees. ATM surcharges are not on the list, so Mr. Burke ruled that banks may not impose them.
A bill pending in the Connecticut legislature, however, would explicitly ban the fees. If it passed, state law would be clear and the OCC would be forced to say whether national banks may assess ATM surcharges in Connecticut, Mr. Crotty said.
"If they do decide (to enact a ban), then the question of federal preemption is clearly presented," he said. "That's a whole new story."