Lashing back against two California cities that are banning automated teller machine surcharges, Bank of America Corp. and Wells Fargo & Co. invoked free-enterprise principles in an attempt to frame a lingering national debate.

Effective Thursday in Santa Monica, Calif., and perhaps next week in San Francisco, the banking companies are not letting noncustomers use ATMs because they are losing the ability to surcharge.

"Is it fair for businesses to ask consumers to pay for products and services? Yes," said Kathleen Brown, president of Bank of America Private Bank West. "Is it fair for consumers to demand products and services for free? No."

Speaking at a press conference in San Francisco, Ms. Brown, the daughter and sister of former California governors, added, "I grew up with a very simple proposition that my momma raised me on, which is: There ain't no free lunch."

Both Bank of America and Wells shut out noncustomers in Santa Monica starting Thursday, when an ordinance enacted last month took effect. Bank of America, formerly of San Francisco and now part of a holding company based in Charlotte, N.C., explicitly threatened similar retaliation in San Francisco, where voters on Nov. 2 approved a ban on surcharges.

Ever since the extra fees for cash withdrawals became prevalent in 1996, when the MasterCard International and Visa U.S.A. national ATM networks lifted their bans against them, consumer groups have argued that surcharging amounts to double-charging and price-gouging. Banks, on the other hand, have held that surcharging covers the added cost of a convenience that many cardholders value enough to pay for.

"This is Economics 101. If you can't charge for a service, that service might not be offered any longer," said David Burgess, vice president of policy analysis at the California Bankers Association, which campaigned against the San Francisco referendum. "We warned that this was a possibility."

Local policymakers and consumer activists lambasted the banks. Arguing consumers are starting to avoid using ATMs, San Francisco City Council President and mayoral candidate Tom Ammiano said barring noncustomers could be a move that "turns around and hurts the banks."

Banking consultant Charles Wendel, president of Financial Institutions Consulting in New York, said, "The whole idea of an ATM is it allows for access, and this will offend customers."

"This is in keeping with the arrogance and bullying that the banking industry has been using on its customers," said Mr. Ammiano, who drafted the San Francisco ordinance. "It's a cheap shot and very bad public relations."

Jon Golinger, consumer program director at California Public Research Group, dismissed the argument put forth by Bank of America that surcharges have helped banks place ATMs in areas that would not have been cost-effective otherwise.

"They are portraying surcharges as something they are forced to do, but before 1996, Wells and Bank of America had a 20-year history of operating and expanding their ATM networks without needing surcharges," said Mr. Golinger, whose group led the surcharge-ban effort in San Francisco.

"This is a lame attempt to make it look like they need the money when in fact you know that nothing could be further from the truth."

The California Bankers Association, Bank of America, and Wells Fargo have sued San Francisco and Santa Monica, arguing that cities lack regulatory authority over national bank fees. The Office of the Comptroller of the Currency has filed a legal brief supporting the lawsuit.

A federal court hearing is scheduled for Monday to decide whether to temporarily block the cities' surcharging bans while they are being litigated.

Bank of America operates 21 ATMs in Santa Monica, Wells Fargo 12.

Wells Fargo declined to discuss whether it would invoke similar restrictions in San Francisco, but Bank of America said it would do so if Monday's court hearing fails to result in a temporary injunction. Bank of America operates 188 terminals in San Francisco, while Wells Fargo has 174 in its headquarters city.

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