Judge blocks enforcement of N.J. surcharge ban

NEWARK, N.J. -- U.S. District Judge Joseph A. Greenaway Jr. on Feb. 17 issued a temporary restraining order blocking enforcement of a Woodbridge Township ordinance that would ban surcharging at bank-owned ATMs.

According to the Associated Press, Greenaway said that New Jersey banks provided "overwhelming evidence" that the ordinance was pre-empted by federal and state banking laws.

In issuing the order, Greenaway also said that banks would have no way to recover lost fees if the ordinance went into effect but was later overturned.

The restraint is effective until April 10, after which Greenaway will consider additional arguments and decide whether to issue a preliminary injunction that could lead to the law being permanently blocked.

Adopted on Feb. 15, the Woodbridge ordinance would have taken effect in March. It set fines of $1,000 a day for noncompliance. More than 25 ATMs would be affected.

Woodbridge Township also asked the judge to permit publication of the text of the ordinance as a legal advertisement in newspapers, which is required to occur 20 days before a law can take effect.

The banks objected, arguing that even if the ordinance were restrained, publication could subject them to consumer fraud lawsuits if they continued to charge fees.

Greenaway banned publication, saying that if the ordinance is ultimately found acceptable, the township can publish it then.

In Iowa, a statewide ban on ATM fees has been upheld only for banks chartered by the state government. The state Supreme Court in Connecticut recently rejected a statewide ban. In California, similar bans are on hold in San Francisco and Santa Monica while the courts consider the issue.