Talking Points — ATM Fee-Ban Bill

							                            Talking Points — ATM Fee-Ban Bill

   •   The U.S. Circuit Court of Appeals has ruled that states can not regulate national bank
       ATM fees or the placement of ATMs. In other words, the National Bank Act governs how
       a national bank conducts its ATM business. HB 3722 would not affect ATM fees imposed
       by national banks. The Office of the Comptroller of the Currency (the regulator of national
       banks) agrees with the court opinion.
   •   In addition, HB 3722 exempts non-bank owned ATMs — e.g., most ATMs in convenience
       stores and other locations. Therefore, HB 3722 would only affect state-chartered banks,
       thus placing them at a competitive disadvantage with other financial service providers.
   •   Legislation banning ATM surcharges may sound good, but will have bad consequences.
       Banning banks from charging non-customers will result in fewer ATMs and higher fees
       passed on to the bank’s customers. In addition, like in California, banks may simply stop
       providing the convenience service to non-customers.
   •   Since banks were permitted to surcharge in 1996, the number of ATMS in the United
       States has nearly doubled with an increase of 96.2 percent. In fact, from 1999 to 2000,
       the number of ATMs increased over 20 percent.
   •   Consumers are requesting convenience and are willing to pay a little extra for it. It’s like
       going to a convenience store instead of a supermarket, using one-hour photo processing
       instead of regular processing or FedEx instead of regular mail.
   •   There are a number of options available other than using ATMs with surcharges.
       Consumers can use their own bank’s ATMs more often. They can write checks instead,
       and they can withdraw larger amounts of cash each time they use their bank’s ATM.
       Consumers also can use their bank’s debit card for most purchases, and they can get
       cash back with a debit card for no fee at all.
   •   Illinois’ extensive disclosure laws ensure that consumers are notified both on the ATM
       machine and on the ATM screen of any fee that may be charged, and consumers may
       cancel their transaction before being charged.
   •   The average cost of each ATM is about $30,000, with an additional $12,000 - $15,000
       per year for maintenance, including cash replenishment, servicing, telephone lines, rent,
       etc.




Illinois Bankers Association, 2003