Senate Banking Committee Chairman Alfonse M. D'Amato went on the warpath again Monday over the spread of automated teller machine surcharges.

At a Manhattan press conference the New York Republican released a government report showing almost two-thirds of the country's banks charge noncustomers who use their ATMs.

"ATM fees have skyrocketed out of control," Sen. D'Amato said. "That's an outrage."

Sen. D'Amato has introduced legislation that would ban surcharges, but the measure is widely opposed by fellow Republicans and has little chance of enactment. Still, Sen. D'Amato vowed to attach his measure to a spending bill or another must-pass piece of legislation that comes to the Senate floor. "We're going to get a vote on this," he vowed.

A General Accounting Office report found that 64% of banks levied surcharges in February, up from 39% in February 1997. The study, updating a year-earlier report, was conducted at Sen. D'Amato's request.

The average surcharge jumped to $1 from 69 cents over the past year, the GAO said. When only banks that levy surcharges are considered, the average fee hits $1.50, up from $1 a year ago.

Banking industry officials have countered that surcharges are needed to cover the cost of putting ATMs in remote locations and usually can be avoided if customers use their own banks' machines.

"Look at how many ATMs there are out there," said Joe Belew, president of the Consumer Bankers Association. "We also ought to be measuring the convenience added by locating machines off of bank premises."

The GAO also said that 79% of the country's 132,000 bank-owned ATMs assess a surcharge on noncustomers. A year earlier, only half the country's bank-owned ATMs charged the fee.

"In the next six months, I predict the situation will be a total monopoly, " Sen. D'Amato said.

According to the GAO, surcharges are spreading at banks of all sizes. The fees are charged by 83% of banks with more than $10 billion of assets, up from 58% the year before; by 73% of banks with between $1 billion and $10 billion of assets, up from 54%; and by 63% of banks with less than $1 billion of assets, up from 38%.

Citing a U.S. Public Interest Research Group study, Sen. D'Amato said customers pay an average of $1.18 to their own bank when using another institution's ATM. With a $1.50 surcharge, the total fee comes to $2.68. "That's a lot of money to be charging people to get their own money," Sen. D'Amato said. "It is unconscionable."

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.