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Friday, Jul. 31, 1998
Bill to outlaw ATM surcharges blocked
Proponent D'Amato promises to resubmit measure banning double charges
Associated Press
WASHINGTON - The Senate Banking Committee Thursday blocked its chairman's push to outlaw double charging on ATM transactions, but Sen. Alfonse D'Amato, R-N.Y., said he'll try again after Congress' summer recess.
D'Amato, who is seeking re-election, has tapped into consumers' ire toward banks in his crusade against automated teller machine surcharges. His fellow Republicans on the panel all voted against him.
``This is not the end, this is just the beginning of the battle to protect consumers from the greedy grasp of bankers who prey on the middle-class wage earner,'' he said. ``ATM double-charging is particularly oppressive to working people who make $20 or $40 ATM withdrawals and have to pay a $1.50 surcharge on top of the $1 or more they're already charged.''
Surcharges take effect when customers use a machine operated by a bank other than their own. ATM surcharges now average $1.27, with the most common being $1.50, and 64 percent of the nation's banks impose them, according to a recent study by congressional investigators.
But opponents of a ban on the surcharges maintain it would constitute price-setting and intrusion in the marketplace by the federal government.
``People have choices,'' Sen. Richard Shelby, R-Ala., said. ``This is an interference in the marketplace.''
D'Amato's bid to attach a measure banning ATM surcharges to a bill that would allow small businesses to collect interest on checking accounts failed by an 11-7 vote. D'Amato's nine other GOP colleagues voted against it, and they were joined by two Democrats, Sens. Tim Johnson of South Dakota and John Reed of Rhode Island.
``The Banking Committee is not the place for consumers to win. It's dominated by special-interest politics,'' Edmund Mierzwinski, consumer program director of U.S. Public Interest Research Group, said afterward.
Tucked into the bill to help small businesses was a provision that would raise Federal Reserve Chairman Alan Greenspan's salary to the level of Cabinet members and also give his fellow Fed governors pay increases.
The proposal would increase Greenspan's annual salary by 11 percent to $151,800, putting him on a par with Treasury Secretary Robert Rubin. Greenspan's colleagues on the central bank's board would receive 8.6 percent salary increases to $136,700.
D'Amato said in an interview he planned to put the surcharge-ban measure before the full Senate sometime after Congress returns in September.
Large banks oppose such a ban, insisting that ATM fees are clearly disclosed and consumers enjoy having the 24-hour convenience. Some small banks, however, say they lose customers to bigger banks and their wider ATM networks because of the fees.
The American Bankers Association, the industry's biggest lobbying group, warned Thursday that enactment of D'Amato's proposal would result in ``tens of thousands'' of ATMs being shut down. ``New ATMs would not be installed in the future,'' the group said.
Several states have enacted laws or issued regulations allowing ATM surcharges, while two states - Connecticut and Iowa - have banned them.
The committee approved the small-business checking bill, which would take effect in 2001. The measure, proposed by Shelby and Connie Mack, R-Fla., now goes to the full Senate. Similar legislation is pending in the House.
In a boon for banks, the bill also would require the Federal Reserve to pay interest to banks on the money they must keep at the central bank.
A parallel provision was quietly dropped from a House bill in April. The White House Budget Office has estimated the requirement would cost some $800 million in five years, reducing the Fed's income and hence its payments to the U.S. Treasury.Post your comments about local news eventsFront Page || Main Index || News || Business || Texas || South Texas Outdoors || Birdwatching || Sports || Entertainment || Selena || Education || South Texas Attractions || World Wide Web