What is this? A law saying you cannot charge for something? Is this stupid or what? What are these people thinking? If you don’t want to pay the fee, don’t use the service! Sheesh! What happened to the free market? Do we want the government setting prices? What the heck were the people of SF thinking?
I’m 39, “ancient” enough to remember the dark ages, before ATMs were around.
Until the early 80s, if I wanted to withdraw money from the bank, I had to go to the bank between 9 AM and 3 PM on weekdays… or from 4:30 - 7 PM on Fridays. COnvenient? Hardly.
Now, if YOU find the ATM fees outrageous, there’s good news: you don’t EVER have to pay them. You can do your banking the old-fashioned way! Just go to your neighborhood bank between 9 and 3, and you can do all the banking you want for free!
Of course, if you try that for a while, you’ll quickly conclude that the service fees at ATMs are a bargain.
I am willing to pay for the convenience, but I do feel like banks gouge you.
It’s been awhile since I bounced a check (knock wood) but given the money they make off of it, they oughtta send me flowers to thank me when it happened.
What chaps my butt, I must say, is that when the banks started closing branches and restricting access to tellers, they talked a lot about how expensive it is to have tellers and how much cheaper it is to have ATMs. I can’t help but feel irked now that they are upping ATM fees and crying about how expensive it is to install them and maintain them.
>> I do feel like banks gouge you.
well, I feel, the bank, the gas station, the supermarket, the landlord, the insurance company, … are all gouging me as much as they can, but we have agreed the free market and competition are the best system we can devise. If one bank charges less for better service it will gain market share, that’s the idea. But outlawing ATM fees? I don’t get it. Maybe I’m missing something or maybe those San Franciscans are weirder than I thought.
I feel credit card interest rates, bounced checked fees etc are outrageous. Do I think they should be outlawed? No way! I am just very careful, I never buy on credit and I never bounce a check. As simple as that. The way I see it, if you don’t want to pay the ATM fee, don’t use it!
I am totally in favour of the banks managing my money and giving me services for free.
Now if I could just talk to my landlord about donating some space to me…
I am against all laws except one that ruled Sandra Bullock should be my girlfriend. Now there is a necessary law! 
If enough of these pesky little laws pass, each one worded a little better to try to be constitutional, the banks will simply stop letting non-customers use their ATM’s.
Then the same namby-pambies will whine about that too.
This is a major issue in the UK at the moment. Two of the largest high street banks decided to up the charges for non-customers using their ATMs, at the same time as dropping so-called “disloyalty charges” levied on their customers using ATMs at rival banks. One of these banks had only recently closed most of its rural branches, so you can imagine the public outcry. A government inquiry was rather scathing of the whole situation. This week one of the banks in question has quietly dropped its plan.
With regard to the OP, this does not sound like a law with a well-reasoned basis. It sounds like a law based on political expediency, pure and simple. Public up in arms over something? Well then, legislate against it and you’ll come out smelling of roses!
I have one question regarding the OP:
What about freedom and democracy? If the majority vote to ban charges, what’s wrong with that? Surely a clear referenda result is democracy in action?
I am personally all for a law against double dipping. (i.e. I get charged by both MY institution and the other bank whose ATM I’m using). It’s a bunch of crap. It costs nothing for the ATM to get the info from another bank, but we have to pay $1.50. That’s not that bad, but my bank charges $1.25 for every transaction on another ATM. Now, I work on a college campus, and my bank branch is on campus, but at the totally other end of the campus (about a 15 minute walk). There happens to be an ATM in the dining place that’s a 2 minute walk from my work. It’s for the university credit union. I’d join that, but I like having my bank’s ATMs all across NY state (which they are). That way I don’t have to pay the fees if I’m in Syracuse, Rochester, or Buffalo. When I’ve got a half hour lunch break, though, I’m not walking 15 minutes each way to get cash. So what do I do? Pay $2.75 in fees to get $10 out of the damn ATM. What a frickin rip off! How about a percentage fee…on only ONE END. So you charge people for using your ATMs if they’re not in your bank, but charging your own customers for using another ATM is not allowed. Then, don’t charge a basic fee, charge a percentage, like 2.5%. Then a $10 withdrawal will net you a 25 cent fee. Big deal. A 20 withdrawal will cost .50. Since most people withdraw $20-$50, the fees would be between 50 cents and $1.25. This doesn’t seem unreasonable to anyone, I’d imagine. If you’re stupid enough to withdraw $500 from a competitor’s ATM, then you get sacked with a $12.50 fine, but since you’re taking out $500, 12 bucks doesn’t seem like much, does it?
Jman
There are charges that banks pay to be a part of the systems that make ATMs work. In the past, theses charges were passed along (and then some to ensure profit) as those fees that your bank charges you when you use someone else’s ATM. Generally there is no fee for using your own Bank’s ATM because it is cheaper for them when you use an ATM instead of a teller. ATMs were profitable for banks before surcharges.
Surcharges do allow ATMs to be in more locations because banks share the profits from ATM surcharges in certain locations as part of the lease for putting the ATM there. That is where they started. BUT most ATMs would be profitable without surcharges. Banks just realized after they started with the surcharges in some locations that people were willing to pay them. So they extended it to already profitable ATMs. They kept them in place because customers would rather pay for convenience than look for another ATM. It also helps motivate new checking accounts. Banks do get customers because they work near an ATM from that bank and are tired of paying $2.50 surcharge when then get their lunch money.
Banks are making money hand over fist from this new source of revenue. The response of San Fransisco’s banks not allowing non-customers to use the ATMs rather than give in to no surcharges is similar to a child holding his breath to get his way. They know if they cave there they will lose a huge source of revenue; it will be the beginning of the end for ATM surcharges in most locations, so they are going to hold their breath a long time.
How do i know this? I worked in the data center for a bank for 2 years, everyonce in a while babysitting ATMs on the weekends. We had the 3rd largest number of ATMs in the Chicagoland area at one point and I talked to the head of electronic banking about this quite a bit.
mattk:
I could probably get a referendum passed making gasoline (petrol to you 
) free, but something tells me the oil companies aren’t going to go for it.
Jman:
So the land lines and computers that connect the banks to a central repository of ATM network information appeared by magic and have no ongoing maintenance costs? Pretty cool!
That’s called “marketing.” Or, alternately, “encouraging you to not use their competitor’s services.”
Dairy Mart stores, BTW, have no-fee ATMs, although your own bank’s charges may still apply.
I don’t know where YOU bank, but at nearly any bank I have ever heard of, it now costs about $3.00 to talk to a teller. The ONLY way to get free banking is to use an ATM machine owned by the bank you have your money at. All other ways of accessing your money (especially talking to a teller) costs money. Its rediculous. There is no reason that a bank should charge you money for the right to access your OWN money which you have given them and which they are now using to make themselves even MORE money.
However, passing a law against it is simply incorrigible. I do NOT support the governemnts right to regulate trade in this manner.
I agree completely, pldennison.
My post was in response to the OP’s suggestion that voters were nuts to restrict trade practices. In my opinion, a worse outcome would surely be enforced unrestricted trade when voters have decided that a particular restriction is necessary. I’ll take democracy in action over any particular economic philosophy any day.
Since noone else is going to argue that that bank atm machines should be price regulated, I will. I think bank atms have a “natural monopoly” or at least a “pratical monopoly” and should be price regulated. If I go to my local grocery store there is one atm and only one. The same thing occurs at my place of work. There is no competition at these locations. If I pick the bank at the grocery store as my bank then I’ll get screwed at the atm at work. Or the opposite will happen if I chose the other bank. It would be silly and expensive to have 5 atms from 5 banks all in a row, so competion can’t solve this problem. A regulatory agency much like the electric company regulatory agency could ensure that the bank made a profit, and that the people don’t get screwed.
I seldom use atms, and really don’t have much of an opnion either way on this issue. I just thought someone should give a pro-atm regualtion arguement.
So pick the ATM at work as your bank, and pay at the grocery store with a debit card/ATM card at the register, where not only don’t you pay a fee (usually), you can also get cash back.
You are correct when you state that it would be impractical for the store to have 5 ATMs in a row, which is exactly why banks belong to ATM networks, a service they provide to you so you don’t have to find a machine belonging to YOUR bank (I remember when you did have to), and which they quite rightfully charge you for.
They have atm networks to prevent them from having to setup the 5 atms-in-a-row. They do this to save them money. Not for my convience or because they love me.
IIRC this was part of the pro atm regulation law agrument. ATMs save the banks money on tellers, and then they charge you more.
In the UK prior to the 80’s most working people had no current/cheque bank account and had maybe a savings account which was only for saving.
Most people were paid cash in hand.
The banks and financial institutions had pushed for years to increase their customer base but mysteriously there was little response.
A little coomonsense market research eventually took place and they found out that the banks were closed for so much of the day that they were virtually useless to employed people. Not very astounding stuff but it took nearly 20 years to find that out.
The banks then decided that rather than inflame the staff unions by changing working hours they would introduce ATMs.
The success was immediate but each bank had its own network so many customers chose their bank on the best network rather than on the services provided.
I well remember having to carry round an up to date list of ATMs that Barclays customers could use and hunting said machine down in a strange town.
Taxi drivers made a fortune.
Eventually the smaller insitutions decided to club together to spread their costs and the true ATM network came into being. People rapidly changed accounts to the new more versatile machines.
These institutions soon got lots more loan business away from the big boys so it was worth it to subsidise the system.
The big banks operated in a much changed world and found themselves in the unusual position of having to compete for customers so they applied to join the network but the stipulation by the system admin was - no charges - and it was only on that basis they were let in.
Fact is the big banks were desparate to join and so they had to take whatever terms they were offered.
Fast-forward and the big banks try to hijack the network by introducing charges, something they had contracted not to do.
The public is now far more financially astute and they stayed away in droves.
The banks had to cave in to consumer pressure.
The banks have made it impossible to use a local branch because so many have closed, thus in many areas they have a monopoly.By introducing double-charging they were affecting the very people who have the most money the middle classes.
Our middle calsses are of a differant nature to what the US calls the same.Ours are the proffesional well educated aspirational type, dostors architects senior design engineers.
Offend the British middle classes and your business will die.
The Banks have backed off in the face of this, interestingly the no-nonsense Germans accept the idea of paying to use facilities which they have no choice but to use.
A couple of points:
- The court ruling does not say that regulations banning double-dippipng are not allowable. It says that San Francisco (or any other municipality) cannot enact the regulation.
Banks are regulated at the state and/or federal level. There is no local jurisdiction. So the Feds could step in at any point and make this rule.
- The San Francisco law (and many others I’ve seen) are just too stupid to live. There are two fees here, one by the account holders bank and the other by the ATM-providing bank.
Which fee is banned? The one where a bank just transfers a little bit of money (and pays a fee to the ATM network) or the one where a bank installed and runs an ATM, prints a paper receipt, pays for electricity, and stores the video from the camera behind the mirror?
If you say the profit goes to the bank that does virtually nothing then you are the big winner.
- For all those people who want the best of both worlds (the convenience of mega-bank and the hominess of the credit union):
You do realize, don’t you, that there is no law barring you from having accounts at more than one institution. Keep a reasonable cash account at mega-bank for spontaneous cash/debit purchases and ATM withdrawals. Do all the rest of your banking at your better priced/serviced credit union. I promise that the OCC won’t mind.
Well, since the people of SF were defending the idea, I figure somebody here would too but to me it sounds really dumb.
IMHO The bank has a resource it has paid for and owns and should be free to use it any way it sees fit and charge whatever the market will bear. I mean the argument that it doesn’t cost them anything is really dumb. Nothings costs anything after you’ve paid for it. (Why should you pay for parking? the space is there and costs nothing. Why should you pay to see a movie? I mean, they are going to show it anyway…)
So the law says to the bank: you cannot charge a fee to customers of other banks who want to use the ATM but you have no obligation to let them use it. DUH! Guess what will happen! Now you have the option of paying and using it. With the law enacted you just lose that option which you can just avoid now if you do not like it. Do you really think you’ll get something for free? Wake up!
Some examples of how similar schemes have worked in the past:
(A) People did not like pre-payment penalties on their mortgages but banks liked them because they are an incentive to not prepay. (This is a penalty for paying your mortgage off early rather than going with the agreed schedule).
So the Federal Government outlaws these penalties. End of story? Yeah, right. The banks invent “points” which are not a prepayment penalty but… have exactly the same effect… in fact, they are a prepayment penalty by another name.
(B) Certain places that sell on installments to people with poor credit were charging “excessive” interest rates. A law was passed putting a limit on the interest that could be charged. Do you really think this will mean people get to pay lower interest? yeah, right.
Now they do not “sell” you the item, they “rent” you the item for the same monthly payment and at the end of whatever number of months they “give” you the item for free. Since there is no caps on rent, there is no problem.
My conclusion: Some (very naive) people think they can force businesses to give them a better deal if they can get a law passed. Then some (naive or lying) politician sees the opportunity to get some votes with this and gets the law passed. Then some businessperson has to devise a way to keep doing business in spite of all this nonsense and interference.
My prediction is that if legislation is enacted that would restrict what banks can charge for using ATMs then the cost of using ATMs would go up. It never fails.
IMHO, the more government gets involved with our affairs, the more it’ll fuck us over in the long run.