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"It's Time to Get Rid of ATM Fees"

A local ATM wanted to charge me three bucks to give me access to my own money! ATM fees have been on the rise all over the place and I finally had enough. This week's letter is to the leaders of the House and Senate Banking Committees to ask our lawmakers to stop banks from ripping us off with their ever-increasing ATM Fees.

If you wish to add your two-cents to the Senate or House Banking Committees, click here and here and send them a message.

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Senator Christopher J. Dodd
Chairman, Senate Banking Committee

Senator Richard C. Shelby
Ranking Member, Senate Banking Committee

Congressman Barney Frank
Chairman, House Banking Committee

Dear Sirs,

I realize that both the Senate and House Banking Committees have been hard at work trying to navigate the nation’s banks through the financial crisis, but I have a major issue with something that is silently going on without much notice - the rapid increase of ATM fees.  Many of the citizens of this country have an awful taste in their mouth due to Wall Street excesses and taxpayer funded bailouts.  Many have been forced to deal with difficult situations – layoffs, massive losses in their 401k retirement plans and in the value of their home to name a few.

With this thought fresh in my mind, I walked into the Bank of America ATM machine at the corners of High Street and Oliver Street in Boston’s financial district.  While I am a Bank of America shareholder and I have my mortgage there as well, I do not have my checking account there.  This, of course, exposes me to Bank of America’s ATM fee – which at this particular branch was an incomprehensible $3.00.

ATM machines were originally a technological breakthrough that benefited both the consumer and the bank.  It lessened bank lines and meant that the customer rarely had to enter the actual bank to have access to their money.  Banks were happy for a number of reasons – their customers were happier, staffing costs were reduced as fewer tellers were needed, and customers generally kept more money on deposit as they could conveniently withdraw it as needed.

ATM fees were very minimal in the early-to-mid 1990’s.  It was very rare to see a charge of more than $1.  At times, there were debates as to whether these fees should be outlawed altogether.  But those debates fizzled and banks were left to do what they do best – gouge the consumer for every dime.

ATM’s provide a commoditized service – they are the same at every bank.  You put your card in, punch in your code, and have access to your money.  There is no reason that a citizen should have to walk the streets of Boston to shop for a reasonably-priced ATM machine.

Big banks with multiple branches gain a major advantage over their smaller counterparts as they can reap the benefits of these outlandish fees on other bank’s customers.  Where is the impetus for a consumer to open a checking account at a small, local bank that doesn’t have branches in most of the country?  If you ever left your hometown and your account is at a local bank, you would be forced to pay these crazy fees at another bank if you needed cash.  The recent financial crisis has taught us how dangerous it is to have so many institutions deemed “too big to fail”, and yet we allow such an advantage to large banks when it comes to something as simple as ATM fees.

You might think that banks are raising their fees to keep up with inflation over the years, but this is untrue.  Inflation has been tame in recent years. Using a CPI calculator, a fee of $1 in 1995 equates to a fee of $1.41 in 2009.  Yet the Bank of America gets away with charging me $3.00 at this Boston branch. 

The machines can’t possibly cost more to maintain after all these years – technology usually improves.  I am not paying for any added bells and whistles at the bank – there was no bank employee there to shake my hand or offer me a smile or a lollipop.

It just seems like banks are starting to take a little too much advantage of the consumer when it comes to ATM fees.  The numbers just don’t add up, and the feeling I got when I pressed “YES” to accept that $3 fee was as if a mugger just took my wallet out of my pocket.

I can understand the free market theory behind allowing a bank to charge a fee to a non-customer.  But the pace of fee increases is unwarranted and the fact that many banks have raised fees in similar fashion smacks of collusion, though I am certainly unable to prove that.

I call on the Senate and House Banking Committees to end this practice of thievery – especially from those banks that used loans from the same taxpayers that they are over-charging to help bail them out.  It’s time to do something to keep our hard-earned money out of the banks’ hands and keep it in our own pockets.  If nothing is done, these fees will surely continue to increase at a rate greater than the rate of inflation. The banks are purposely raising fees as much as they can while still trying to keep it off of your radar. It's about time we say, "Enough already!" and take a stand by eradicating these good-for-nothing fees.

I hope you will give this idea some thought.  It would be very popular amongst voters, it would be economically beneficial for the consumer, and it just seems like the right thing to do at this time. The US Taxpayers deserve it.

Thank you.

Sincerely,

Scott Riecke

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