West Coast Milestone: B of A to Charge Noncustomers for ATM Use

BankAmerica Corp. said it will charge fees for noncustomer use of its automated teller machines, becoming the first major bank on the West Coast to do so.

The bank plans to charge $1.50 per transaction, beginning this weekend, at about 3,600 ATMs in Oregon, Washington, Idaho, Hawaii, and California. It had already imposed ATM fees for noncustomers in four states in the Southwest.

"We've evaluated it for quite a long time, and we feel that we do need to recover the costs of providing service to people who are not customers of our bank," said Harvey Radin, a BankAmerica spokesman.

The fee should generate about $40 million in pretax income annually for the bank, or about 7 cents a share in 1997 and beyond, according to Anthony A. Lombardi, analyst at Dean Witter Reynolds.

"The other variable at work here is that BankAmerica may be trying to entice some new customers from Wells Fargo and elsewhere who are upset at all the consolidation there," said Mr. Lombardi. "They'll be saying, 'if you're upset, come to BofA, and you won't have to pay the $1.50 fee."

Analysts suggested that other large western banks will likely follow BankAmerica's lead.

KeyCorp's Washington subsidiary said this week that it too would be charging noncustomers who use its ATMs a $1 fee. Rob Gill, a KeyCorp spokesman, said the decision was made before BankAmerica's announcement.

"We had a pilot program in place since June and found that most transaction activity was flat or had increased," said Mr. Gill. "So we didn't see it as a deterrent."

KeyCorp has 400 ATMs in Washington, 80 of which should have the fee by early-1997, Mr. Gill said.

BankAmerica's chief California rival, Wells Fargo & Co., said it had not yet made a decision on foreign customer ATM charges.

"We're always evaluating these things," said Janet Otsuki, a Wells Fargo spokesperson.

Wells Fargo is currently charging noncustomer usage fees in Nevada, Texas, Idaho, and Utah, in the branches that it acquired from First Interstate Bancorp. Those fees, ranging from 75 cents to $1.50, were in place when Wells Fargo acquired the operations.

BankAmerica's ATMs located in retail locations, such as Luckys supermarkets, will not charge the foreign customer fees as "an accommodation to our retail partners," said Mr. Radin.

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