Senate Banking Committee Chairman Alfonse M. D'Amato renewed his commitment Wednesday to banning ATM surcharges.
The charges are "wrong, unconscionable, and they must be stopped," the New York Republican said at a press conference called to trumpet a report showing nearly half of all banks are levying the fees.
From the steps of City Hall in Manhattan, Sen. D'Amato said he is "determined" to enact legislation outlawing surcharges. He pledged to introduce the bill in several weeks when a General Accounting Office report on surcharging is released.
Sen. D'Amato requested that report in December, asking the congressional watchdog agency to find out how many banks charge fees to noncustomers for ATM use, the average fee, and how the fees are affecting consumer use of ATMs.
The senator first introduced legislation to ban ATM surcharges last May, but made little progress. As he resurrects the bill this year, he continues to face long odds, though his base of support has widened beyond consumer advocates to include community banks.
"Passage is really a toss-up this year," according to one industry lobbyist. "All he needs is one Republican."
Currently, Sen. D'Amato's bill has the support of Senate Banking's eight Democrats. He would need to persuade just one GOP member to get it out of his committee.
The senator said he will attach the bill to other legislation on the floor of the Senate if all else fails.
"Banks have a pretty big wish list," said Ed Mierzwinski, consumer program director of the U.S. Public Interest Research Group, which wrote the study. "If banks move any of their financial modernization package to the floor, we will do what we can to make sure ATM (fee) bans are part of it."
The Electronic Funds Transfer Association has convened a task force of industry and consumer representatives to investigate the matter and testify before Congress.
H. Kurt Helwig, executive director of the Herndon, Va.-based trade group, said Sen. D'Amato's crusade is "a very pro-consumer message with populist appeal." But he said legislation "would set a dangerous precedent" of industry regulation.
Edward L. Yingling, chief lobbyist for the American Bankers Association, said the fees present a "tough public relations issue for the industry, but I don't think an outlawing of the access fee will pass Congress because it is widely seen as price controls."
Indeed, in the House lawmakers are considering a much more narrow disclosure bill designed to ensure consumers are aware of the fees.
The market, too, is responding as community banks across the country join no-surcharge networks.
"The increasing number of no-surcharge networks makes passage of a bill difficult," according to Karen Shaw Petrou, president of ISD/Shaw Inc., a consulting firm that tracks banking legislation.
A spokesman for Visa's Plus network said banks are using surcharging to increase ATM deployment to meet consumers "demand to cash access whenever and wherever they want it."
While banks insist the charges are necessary to recoup the costs of running large networks, Sen. D'Amato called the argument "nonsense."
"ATMs were supposed to save consumers money." He said the fees are "pure profit," and they "hurt small banks."
Larger banks are using their big ATM networks as competitive weapons to encourage consumers to switch their deposit accounts for free access. Even so, a survey by Grant Thornton indicates that 32% of community banks are surcharging, with 16% more expected to add the fees this year.