Consumer Payment Card News

Pennsylvanians Say No To ATM Fees

A Harrisburg radio station, KQV, said yesterday an informal telephone poll conducted last week found 80% of consumers in favor of the Bodack-Belan initiative to ban ATM surcharges in PA. More than 1,000 calls were made to the station to vote on SB 21, a proposed law to ban ATM surcharges. State Senator Belan said he hopes PA will join IA and CT in banning the fees calling the practice anti-competitive and anti-consumer.


Calling the survey’s results reflective of the same constituent opinions they’ve been hearing ever since Pennsylvania’s largest banks began imposing a double fee — or surcharge — on ATM usage by customers of other financial institutions, state Senators Leonard J. Bodack and Albert V. Belan said they’re not surprised by a Pittsburgh radio station’s phone poll showing overwhelming support for legislation they’ve sponsored to prohibit the extra fee.

According to a KQV Radio poll Thursday, April 3 — in which a total of 1,037 calls were placed to the station to “vote” on the Bodack/Belan bill (SB 21) that would ban ATM surcharges — the vast majority of respondents, 80% or 828 callers, support the proposed legislation. Only 20 percent, or 209 callers, oppose the bill.

“By a 4 to 1 margin, the KQV poll demonstrates that most people believe we need a law to prohibit financial institutions from charging twice for a single ATM transaction. I’d also venture to suggest that even those people who don’t agree with our bill would say they don’t like the surcharge and would support our added plea for industry-wide voluntary action to put a stop to it,” Bodack said.

Belan said the radio poll demonstrates “the public isn’t buying the banking industry’s attempt to justify the practice. It’s tough to defend the indefensible,” Belan said.

Both Allegheny County Democratic lawmakers reiterated the simple fact that the surcharge fee — which started showing up at ATMs owned by several of the state’s largest banks last summer — is on top of a network interchange fee ATM-owner banks already receive for the express purpose of covering the cost of providing ATM service to a customer from another bank.

“As we’ve said from the start, people should not have to pay twice for access to their own money. The ATM-owner bank already gets a fee from the ATM user’s bank, paid directly or indirectly by the customer,” said Bodack.

“The ATM surcharge,” added Belan, “is an outrageous, double-charging, anti-consumer and anti-competitive ploy.”

Since most of the ATMs are owned by the larger banks, Belan and Bodack contend the profit-padding surcharge is also being used as a competition stifling scheme to siphon customers from smaller community-based banks, savings institutions and credit unions.

“The biggest banks are not only gouging the public with an excessive fee, but they’re telling consumers that the only way they can still have access to the most ATMs and not pay twice for an ATM transaction is if they become their customers,” said Belan.

“It’s unfair to the smaller banks,” added Bodack. “It’s unjust to consumers. And the banks and the people know that, and the KQV poll confirms it,” Bodack said.

The ATM surcharging phenomenon surfaced in Pennsylvania and other states after the major ATM networks, Plus and Cirrus, lifted a previous self-imposed surcharge ban on April 1, 1996. Since then, legislative bans have been proposed in a dozen states and a national ban is under consideration in Congress. Connecticut and Iowa already prohibit the ATM surcharge.

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