A movement against ATM surcharges appears to be picking up steam across the nation.
Despite a court decision late Monday that temporarily bars Santa Monica and San Francisco from enforcing anti-surcharge ordinances, several cities are considering similar bans.
New York is expected to introduce a measure to prohibit the fees, and consumer advocates said Los Angeles, New Orleans, and other cities are discussing bans.
The U.S. Public Interest Research Group, which has been getting queries from an "overwhelming" number of city councils interested in drafting surcharge bans, expects a string of court battles from the banking industry as more municipalities pass such legislation, said the organization's consumer program advocate, Edmund Mierzwinski.
"This is going to be fought out in the courts for some time, and ultimately it will be a fight in the Supreme Court or Congress," he predicted in an interview Tuesday.
Mr. Mierzwinski said his group is looking for allies in Congress to back a surcharge ban.
Last year, former Senate Banking Committee Chairman Alfonse M. D'Amato pushed hard for passage of a bill to ban surcharges but met with staunch resistance from his Republican colleagues.
In an interview Tuesday, Sen. D'Amato said consumers should push Congress to enact legislation in 2000. "The only way they can do it is by Congress," Sen. D'Amato said. "The local legislative initiatives have a tough course. Congress has the authority to do this, not the states or local governments. It would be extraordinarily difficult to pass local legislation which can withstand a court challenge."
Rep. Bernard Sanders, I-Vt., attempted to attach a surcharge ban to the financial reform law enacted Friday, but the provision was watered down to simply require a disclosure on ATMs. The lawmaker has since reintroduced the bill as standalone legislation.
In the San Francisco and Santa Monica case, U.S. District Court Judge Vaughn R. Walker said the surcharge-ban ordinances likely would be preempted by the National Bank Act, which gives the Office of the Comptroller of the Currency wide authority to regulate the activities of national banks.
OCC chief counsel Julie L. Williams said in an interview Tuesday that the ability to surcharge is "a very basic issue for national banks. The type of service that they offer through ATMs is clearly part of the business of banking they are authorized to conduct under federal law; they are just as clearly authorized to charge for products and services."
In the California case, Judge Walker ruled that the banks asking for the injunction -- Wells Fargo & Co. and Bank of America Corp. -- must track the amount of surcharge income they receive until a court ruling ultimately is handed down. If the court ultimately rules in favor of the cities, the banks would have to refund the fees to consumers.
Regardless of what the court eventually decides, Judge Walker acknowledged that banning surcharges will spark legal battles across the country.
"It is unlikely that this court's ruling on this matter will be the last heard," he said.
Jacqueline S. Gold contributed to this article.