Newspaper article THE JOURNAL RECORD

ATM Surcharge Debate Heats Up in Banking Industry

Newspaper article THE JOURNAL RECORD

ATM Surcharge Debate Heats Up in Banking Industry

Article excerpt

On top of a recent Supreme Court battle and a continuing congressional battle between banks and credit unions over membership requirements, the two industries continue to argue over another unresolved issue -- ATM surcharges.

In response to a new study, the Oklahoma Credit Union League has reiterated its strong stance against ATM surcharges and is hoping to again support legislation prohibiting ATM surcharging in Oklahoma.

But a spokesperson from the Oklahoma Bankers Association holds it isn't fair for consumers to expect to use this convenient and expensive technology for free. A recent study conducted by the Public Interest Research Group shows that banks are dramatically increasing charges to noncustomers as well as their own account holders who use another bank's ATM. According to the PIRG study, 83 percent of large banks impose surcharges nationwide, with only 13 percent of member-owned credit unions imposing such charges. Bob Bianchini, OCUL president, said that surcharge increases are just another way for banks to increase their bottom line. "Credit unions have a mission of providing the best possible service to the consumer," said Bianchini. "Banks are interested in the bottom line profit despite the effect it has on its consumers. Banks are currently in their sixth straight year of record profits, and raising surcharges are just another way to increase their bottom line." Legislation to prohibit ATM surcharges died in committee last year. The legislation was heavily opposed by the OBA. The OCUL said it hopes to support similar legislation in 1999. "We hope that our elected officials could look beyond the bankers' self-interests and listen to the needs of the consumer," said Bianchini. Darrell McClendon, director of communications at the OBA, called the OCUL's stance hypocritical and insincere. "The vast majority of ATMs in Oklahoma have been installed by and are operated by banks," noted McClendon. "Credit unions have invested much less money to provide ATMs for their customers, but instead are content to `piggyback' off the ATM system that banks have paid for. What the Oklahoma Credit Union League apparently advocates is having banks supply their customers with ATM service without recouping any of their capital or operating costs. The league's position, in the end, is a self-serving and insincere attempt to have banks underwrite services for credit union customers. "Furthermore, with their exemption from income taxes, credit unions should be able to charge lower fees than tax-paying financial institutions," continued McClendon. "Nationally, credit unions, enjoy a $1 billion taxpayer subsidy, but they pretend to compete on an equal basis with other financial providers. It's the height of hypocrisy for credit unions to gladly accept their tax subsidy while chastising competitors who must cover substantial tax costs in their operations. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.