Four community banks in Louisville, Ky., just said no to ATM surcharging.

What's more, instead of imposing fees on noncustomers, Great Financial Bank, Republic Bank and Trust Co., Stock Yards Bank and Trust Co., and Commonwealth Bank and Trust Co. have joined forces to let consumers know there are alternatives.

"We're trying to be the good guys," said Scott Trager, president of $1 billion-asset Republic.

The four banks, which among them have 48 ATMs in Jefferson County, "are taking the high ground," said David Brooks, chairman and chief executive of $350 million- asset Stock Yards.

The banks' full-page ad in Sunday's Louisville Courier-Journal said that using their ATMs will " keep more of your money where it belongs." The banks are offering a free guide of nonsurcharging ATMs around Louisville and said they expect other community banks and credit unions to join their cause.

"Community banks will always have to be a little more flexible to survive," said Mr. Brooks.

ATM surcharging became an issue in April when Visa and MasterCard lifted a ban preventing members of their Plus and Cirrus networks, respectively, from imposing the charges.

For these Louisville banks, not surcharging has become a marketing ploy.

Rather than lose customers to bigger banks with higher concentrations of ATMs, the banks are pooling their resources to maintain loyalty and gain ATM traffic. Interchange income may be a fringe benefit.

Out-of-state banks dominate the Louisville market. Banc One Corp., PNC Bank Corp., and Fifth Third Corp. have imposed charges of 50 cents to $1.50 for using their machines. National City Corp., another leading player, is testing fees at one location and will make a decision based on the results.

Community banks "have been riding on the coattails of major machine installers," said John Russell, a Banc One spokesman.

Though banks pay interchange fees when their customers use other banks' ATMs, typically 50 cents to 75 cents, Mr. Russell said those fees don't cover the cost of maintaining the machines. Smaller banks will have to install their own machines, band together, or pay the surcharges for their customers, he said.

"There is no longer a free ride in the financial services industry," Mr. Russell said.

Though Stock Yards' Mr. Brooks said he doesn't believe the extra fees are necessary, "we're not criticizing the big banks," he said. He also said he doesn't support legislation forbidding surcharging. "The best solution is to give people choices."

"We're fighting back against the big banks," said Jack Shipman, president of $2.7 billion-asset Great Financial, the largest independent bank in the state. He said independents need to preserve their accounts with convenience at the lowest possible cost.

"We're firing a shot," he said. "Maybe it will be heard, maybe not. If we get enough reaction, maybe they (the big banks) will change their actions."

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