As a teacher of banking and a columnist for this newspaper, I find myself partial to the views of the members of this industry. But with all the impartiality I can muster, I disagree with the legislators and regulators who want to make banks give noncustomers free access to their automated teller machines.

No one says a phone company must allow people to use their pay phones without charge. No one says that if a restaurant has a buffet, anyone who passes by can come in and take a handful of food without paying. Why then should a bank let noncustomers get cash for free?

The bank has paid to set up the machine. It maintains the machine and refills it. What's more, the bank suffers the loss of time value of money- the time between which the cash is dispensed and the issuing bank covers the withdrawal.

I can see the reasoning of the lawmakers who think charging a fee for noncustomers is a rip-off. These people are bank customers like the rest of us, and they don't understand why they have to pay twice-once to their own bank and once to ours.

But there are better solutions than banning surcharges entirely.

What if the banks in the ATM network arrange it so that only the card- issuing bank can assess surcharges?

Obviously, the fees would be high enough so that the customer's bank could compensate the dispensing bank for its time and trouble. But that way, customers would be charged only once.

They might be happier paying $2 once than feeling they were being double-charged, paying $1 at the home bank and another $1 at the dispensing bank.

How many times have you used a foreign ATM that charged you a higher fee than your own bank charged? If only card-issuing banks applied charges, customers would know exactly how much they'd be charged for withdrawals at foreign ATMs.

Standardizing the fees would also eliminate the negative publicity aimed at the dispensing banks. And nonbank ATMs in stores, pool halls, and casinos could not charge the high fees that, when they appear on the cardholder's statement, often promptthe holder to blame his or her bank rather than the owners of the ATM.

The key to this proposal is that the banks whose cardholders use foreign ATMs would have to pay much higher interchange fees. And unless the issuer's bank wants to absorb them, fees are likely to be passed on to the cardholder.

But this is not all bad, or even a little bad.

ATM owners would not be able to charge more than foreign banks do, because people would not be willing to pay an additional fee.

And banks that want to be competitive with multibranch giants can absorb the interchange fee and use the savings to cardholders as a marketing weapon.

Banks instituted ATMs originally to cut operating costs. If they really mean it, they will be willing to absorb some, if not all, of the cost of having cardholders use foreign banks. This will curb the demands on their tellers and branches-saving the expenses that ATMs were supposed to save in the first place. Mr. Nadler, an American Banker contributing editor, is a professor of finance at Rutgers University Graduate School of Management.

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