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Proposed Washington State ATM Surcharge Legislation

Calling big national banks’ new practice of charging non-customers hefty ATM fees a clear ploy to force consumers to switch banks, credit union presidents, independent bank and thrift officials Tuesday asked state lawmakers to put a temporary reprieve on the ATM pricing tactics of big banks.

The practice of charging non-customers hefty ATM fees will cost consumers $89 million a year and could cause long-term harm to Washington’s financial marketplace, credit union presidents told members of the Senate Financial Institutions, Insurance and Housing Committee. They urged lawmakers to pass Senate Bill 5813, and grant a temporary one-year reprieve from hefty ATM-fee hikes imposed by big national banks on credit union members and small bank customers.

“This bill would give us a very, very important — though brief — window of opportunity that we need to expand our own ATM systems so we can offer consumers an alternative to predatory surcharges,” said Anthony Backes, president of Seattle Telco Federal Credit Union.

“We think these hefty ATM fees are unfair to our members and to other people who have chosen not to bank with large national corporations,” added Laurie Stewart, president of the Credit Union of the Pacific. “Ironically, many of these people have chosen to bank with credit unions or at smaller financial institutions expressly to avoid these high service charges.”

Members’ complaints about these excessive fees have been pouring in since last November, Backes and Stewart said, when Bank of America (Seafirst), Key Bank, U.S. Bank and Wells Fargo began charging additional fees, ranging from $1 to $1.50 per transaction, to non-customers. The fees come on top of existing 45- to 55-cent interchange fees banks have been receiving all along from financial institutions whose customers use their ATMs.

SB 5813, sponsored by Senate Majority Leader Dan McDonald, would temporarily defer the surcharges, giving small banks and credit unions more time to reestablish independent ATM networks.

Credit unions and small banks decided against expanding their own ATM networks in the 1980s, after agreeing with the big banks to create universally-accessible ATM networks, said David Adams, president of the Washington Credit Union League.

“For years, credit unions and small banks cooperated with this state’s major banks to create a network of ATM machines, realizing that a universally-accessible system would save all financial institutions time and money,” Adams said. “Now that these out-of-state banks control the majority of ATM locations, they’re charging additional surcharges called `access fees’ that are proving costly to consumers.”

Credit unions in Washington state have launched a campaign, called the Washington Credit Union Campaign for Consumer Choice, to urge support for the one-year reprieve on ATM fees, and to support other state and national policies that protect consumers’ access to credit unions’ financial services.

Along with its grassroots campaign to support legislative protection for consumers, the Washington Credit Union League is also developing a statewide list of no-fee credit union ATMs and supporting expansion of the no-surcharge ATM network called CU Access in Washington and Oregon, Adams said.

In addition to Senate Majority Leader Dan McDonald’s support, SB 5813 is cosponsored by Sens. Shirley Winsley (R-Fircrest), Margarita Prentice (D-Tukwila) and Mike Heavey (D-Seattle). The Senate Financial Institutions, Insurance and Housing Committee has not yet scheduled a vote on the measure.

Consumers interested in receiving more information about the Washington Credit Union Campaign for Consumer Choice should contact their credit union or the Washington Credit Union League directly at 800/552-0680.

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