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Stop Whining About Three-Buck ATM Fees

Congress and bank regulators have bigger fish to fry.

Get over the lousy three bucks.

Americans for Fairness in Lending this week released its "Statement of Concern about Rising ATM Fees," expressing shock and dismay at

Bank of America's

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plans to increase ATM fees for noncustomers to $3.

The consumer group feared that "the ultimate consequence would be an unconscionable squeeze on low and middle-income bank consumers."

It's unclear how providing a service to noncustomers for a fee could ever amount to an "unconscionable squeeze."

Before ATMs existed, the only way to get money out of your bank account was to go to your bank. Now it seems that the consumer group and others signing the statement, including the Service Employees International Union, are trying to change a convenience service into an entitlement.

Bank of America boasts the largest ATM network in the U.S., with more than 17,000 branded machines. For now, the fee increase will affect about two-thirds of its ATMs. Machines at convenience locations, such as malls and airports, will not have their fees increased. Fees will also remain lower in Chicago, where LaSalle Bank (a unit of



) is headquartered. Bank of America has just received regulators' approval for its pending acquisition of LaSalle.

Bank of America's stance on the fee increase is that continued investment in its ATM network is expensive, and it is only fair that noncustomers using the network pay for the service. A call to Bank of America requesting comment on its strategy and revenue expectations from the fee increase was not returned.

None of Bank of America's larger competitors, including


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JPMorgan Chase

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(WB) and

Wells Fargo

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, have announced plans to follow suit.

Americans for Fairness in Lending has gone on the record in calling for Congress and bank regulators to place a cap on ATM fees. While consumer groups can make a pretty strong case that some bank fees for credit card late charges and bounced checks have gotten out of hand, there's simply no reason for nanny-state regulation of ATM fees.

Calls for Congress or bank regulators to take action on bank ATM fees are distracting and irresponsible -- there's much more important legislative and regulatory work to be done on the lending side of the industry.

Convenience Costs

In the long history of banking, the ATM is still a relatively new service. Many of us functioned perfectly well before ATMs allowed us to withdraw our money from any bank. Granted, if you are withdrawing only $20 from another bank, it's quite expensive to pay $2 (or $3) to the bank, plus another $1.50 to you own bank for using a "foreign" ATM. Doing this is financially lazy.

Statements by consumer groups that consumers have no choice but to use other banks' ATMs since they can't get to their own banks during business hours are utter nonsense. There are so many ways to avoid ATM fees:

  • Use your bank's ATM during nonbusiness hours. Most banks have 'em, and if yours doesn't, get a new bank.
  • Use your debit card to make purchases. This costs nothing!
  • Use common sense. A little planning for your cash needs goes a long way. Not too long ago, none of us had the option of withdrawing money from any bank but our own.

Philip van Doorn joined TSC Ratings as a banking analyst in February 2007. He has a varied background, with a B.S. degree in business administration from Long Island University. He previously worked as a loan operations officer with Riverside National Bank in Fort Pierce, Fla. Before that he was a credit analyst, monitoring banks and thrifts at the Federal Home Loan Bank of New York.