In Wisconsin, hope apparently springs eternal.
Some legislators there are seeking to accomplish what so many others have failed to do: wipe out automated teller machine surcharges to noncustomers. Two efforts by California municipalities - San Francisco and Santa Monica - were quashed by courts, as were attempts by Woodbridge, N.J., and the state of Iowa.
The resounding lack of success made the issue seem dead until three Wisconsin state legislators came up with a new strategy. Their plan - which takes up a popular political cause right before the election season - is to tax banks 100% of the surcharges they impose on noncustomers. The taxes would be earmarked for another popular cause: property tax relief.
"We're just looking for a way to ease the burden of the consumer," said state Rep. Christine Sinicki, one of three Assembly Democrats promoting the idea.
Rep. Sinicki said financial institutions would not be able to charge an additional "user" fee along with the surcharge in order to get around the tax. Any fee would be taxed 100%.
There is doubt in the banking industry that such a law would pass judicial and regulatory review. Under banking laws and Supreme Court decisions, states cannot interfere with certain banking practices, including rate-setting.
Dean Debuck, a spokesman for the Office of the Comptroller of the Currency, said his agency could not discuss the Wisconsin situation without first conducting a legal review. However, "we have issued opinions in terms of preempting state law" with respect to nationally chartered banks, he noted.
Kurt Bauer, a lobbyist for the Wisconsin Bankers Association in Madison, said that if the Wisconsin legislators had their way, bank ATM deployers would probably make a number of unpalatable changes, such as forbidding noncustomers to use ATMs and removing off-premises ATMs. Nonbank ATM deployers might be forced out of business, he said.
"You will see the elimination of ATMs, particularly in remote locations," Mr. Bauer said. "They need the surcharge to recoup the cost of placing it there. Why would anybody, a financial institution or any entity, place an ATM in airport? How is that pro-consumer? You're taking choices and convenience away."
Wisconsin would be creating a law for which there is no precedent, Mr. Bauer said. The "government is proposing to tax 100% of the proceeds of a service that a business provides in a supposedly free-market economy," he said. "I don't know how serious this proposal is. I think it's a recycled campaign issue."
Mr. Bauer said the proposal is just "pandering" to consumers, because fees in general are unpopular. "Who likes to pay for anything? I don't like to pay parking meters."
Rep. Sinicki conceded that the proposal has political overtones. She said she and two Assembly colleagues, Reps. Mark Pocan and Frank Boyle, want to use the issue to defeat one of the Democratic candidates, state Sen. Kevin Shibilski, running for lieutenant governor in today's primary. She said Mr. Shibilski voted for a Republican budget this year and previously voted against a Democratic proposal to ban ATM fees.
"We're trying to make the point known that Shibilski voted for the ATM charges," Rep. Sinicki said.
Mr. Shibilski did not return several calls seeking comment.
Rep. Sinicki said that she would consider dropping the tax to something less than 100% if the legislation met with resistance. "Were starting with 100%, but in trying to get legislation passed, it does come down to negotiations," she said.
"There's no denying [that ATMs are] providing a convenience," Rep. Sinicki said. "However, should I be charged a $1.50 every time I want to access my money? A dollar and fifty cents can buy a gallon of milk."
The upcoming state elections could also effect how the legislation is introduced. Normally, such legislation would be introduced in the Assembly's Financial Institutions Committee, which has a Republican chairwoman, Suzanne E. Jeskewitz.
Rep. Jeskewitz said she opposes taxing ATM fees. It would not help consumers, she said, and would "punish banks."
"They still have the expense of the ATM machine," Rep. Jeskewitz said. "They charge noncustomers for the convenience of using someone else's bank."
She added, "We're trying to encourage businesses to come to Wisconsin, but then we'll tax the devil out of them."
Republicans now hold a seven-seat majority in the Assembly, but the entire body is up for reelection. The Democrats hold the state Senate by two seats, and half the Senate is up for reelection.
Del Tonguette, the president of Del Tonguette Consulting in Columbus, Ohio, who also ran the electronic funds transfer network GulfNet until it was sold to Pulse EFT Association in 1997, said surcharging is a "fair pricing mechanism. There's noting wrong with charging a consumer for using an ATM. I would encourage legislators to stop picking on surcharging. It's a service that does not come cheaply. It's a definite expense to the bank, so therefore they deserve a return on their investment."
