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ATM Fees Hit All Time High


Ravenous Wolf
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ATM Fees Hit All Time High

LAST UPDATE: 12/2/2005 9:42:23 AM

The average cost of withdrawing cash from an automatic teller machine owned by a bank that you do not have an account with is now $2.91, a record high according to a new study by bankrate.com. The study also found that Americans will pay more than $4.3 billion in ATM withdrawal fees this year. Just two withdrawals a week from another bank's ATM will cost you $300 per year.

As News 4 WOAI Trouble Shooter Jeff Coyle reported in 2004, only a handful of banks offer free ATM withdrawals. Most consumers are charged twice when using another bank’s machine—a surcharge by the bank that owns the ATM and a “foreign fee” from the consumer’s own bank.

"This is just an additional fee that they saw that they could add and try and get away with. And so far they have," says Luke Metzger of the Texas Public Interest Research Group which opposes double fees.

Some U.S. cities and states areas have tried to limit ATM fees or ban them altogether but the courts won't allow it. Bank fees should be determined in the marketplace, says the Texas Bankers Association.

"For those banks that do charge for ATM services or foreign bank services, the consumer can tell. And make a choice whether they continue their relationship with a particular bank," says John Heasley of TBA.

In other words, it pays to do your research.

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In fact, the 9th Circuit Ct. of Appeals (2002) properly shot down Santa Monica's effort to limit ATM fees. And while I usually feel that consumers tend to get the sharp end of the stick, as a matter of law, I have to side with the banks and the courts. Have we now interpolated the right to low ATM fees into governmental protection clauses? I think you are mixing up how you feel about paying them and their legal right to collect them. I hate them as much as you, believe me. But if you don't like the fee that an ATM charges, then don't get cash there- plain and simple. There is no entitlement to a low fee for cash, and we are certainly not in a situation where one can claim there is a monopoly requiring regulation.

The best solution to this is to change banks if their fee is high and avoid ATMs that are not affiliated with your bank or have any fee whatsoever. Besides, 6 out of 7 days of the week I make my way through the world without a dime on me, thanks to the cashless society that we now live in!

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Why so? For once, the "legislate from the bench" 9th circuit got it right and followed the law. Basically, the federal government precludes states from imposing exactly this type of regulation. It isn't their place. Give me one good legal or public policy reason why the city of Santa Monica should regulate fees.

Again, I hate ATM fees and I do NOT pay them- unless I am on vacation. But these fees are part of an explicit consumer-merchant contract. You want instant cash, this is the fee. Regulation like what was proposed is big brother sticking its nose where it doesn't belong, and leans toward socialism. If you had a business, I bet you'd feel different!

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I look at it as a two way street. The city of Santa Monica could have imposed limits on fees, taxes, or whatever. But nowhere are banks required to operate ATM's in that area either. Banks could have shut down their ATM's if they didn't like the idea of a fee cap. That is the free market at work!

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Okay- even in your twisted view of what a free market is, we have a case of a well-intended policy having unforeseen consequences. So there are less ATMs in Santa Monica after the imposition of the new ordinance. How is that good for anyone?

No one can claim consumers have some sort of a protected right to instant cash. Cash-on-demand is a luxury. If that statute were to stand, then maybe next year Santa Monica decides that consumers pay too much for gas, then the year after they cap the price for car washes, then produce, etc....it is a slippery slope that is hostile to business- and unnecessary (& unAmerican) really.

I still assert that the best policy by far is not to pay ATM fees by not using them. Its plain old market forces at work. Charge too much and you won't have customers. The reason fees continually go up is because we live in an on-demand society and people continue to pay the fees and use them. Hey, that's their right too. Just don't join 'em!

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