WASHINGTON -- The Independent Bankers Association of America told Congress that it should allow market forces to dictate whether ATM fees should be imposed for ATM use and how much those fees should be.
Intervention from Congress should happen only if and when the marketplace fails to operate.
In testimony to the Senate Banking Committee, Linda Echard, president and CEO of IBAA Bancard, said, "At this time, there is no evidence that the market is not working. We do not believe that legislation directly affecting pricing of ATM services is necessary or desirable due to several factors. First, consumers have several options. Second, price-fixing would lead to reduced convenience for consumers. And third, price-fixing would reduce or stifle innovation."
Echard told the Senate Banking Committee that ATMs are a convenience for consumers. Those who do not want to pay an ATM surcharge at a foreign machine have other avenues to access their funds: visit their bank, write a check, or request cash back at the point of sale with a debit card.
Echard also told the committee that the rapid acceleration of ATM
installations "has been fueled by the revenue stream available from
surcharging. In many of those locations, the ATM would not be economically justified if the consumer were not willing to pay a fee."
ATMs also provide consumers with other services including stamp sales and local ticket purchases. Legislation affecting pricing would inhibit the creation of new services available from ATMs, Echard said.
Community banks are less likely to surcharge, and when they do their fees are generally lower than large banks. And according to a recent IBAA survey, 39 percent of IBAA member banks provide tips to their customers on avoiding ATM surcharges. Moreover, many community banks are still absorbing foreign ATM surcharges for their customers to remain competitive.
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