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Most anti-surcharge legislation leaves independent deployers feeling like they've dodged a bullet. Perhaps because it's easier to make banks out to be the bad guys, politicians have targeted financial institutions and excluded ISOs in their proposals. Anti-surcharge ordinances adopted by the California cities of San Francisco and Santa Monica, for example, both apply only to bank owned ATMs. But a case pending in New Jersey takes aim at ISOs as well as banks. The Newark Municipal Council voted 9-0 on May 10 to adopt an ordinance that would ban surcharges at all ATMs in the city, New Jersey's largest. Although it would require approval by Mayor James Sharpe, who reportedly opposes it, the Council could override a mayoral veto. The state Bankers Association obtained a temporary restraining order based on arguments that Newark's ordinance is preempted by the National Bank Act and other laws that leave regulation of banks to federal and state agencies. According to W. Stuart Cameron, executive vice president and director of government relations for the New Jersey Bankers Association, U.S. District Judge Joseph A. Greenaway Jr. will hear arguments from both sides and decide whether to grant a permanent injunction on August 23. The Newark case has been combined with one in Woodbridge, N.J., where members of the Town Council on Feb. 15 approved an ordinance banning the fees at all bank-owned ATMs in the township. Greenaway issued a temporary restraining order in that case as well, saying that banks provided "overwhelming evidence" that the ban was preempted by federal and state banking laws. "I don't believe in second guessing a judge but, based on the facts to date, it seems as if the case should come out favorably to the banking industry," Cameron said. But what about ISOs? Unlike financial institutions, there are few regulations on the books governing their operation. While the financial industry has relied heavily on the National Bank Act in cases where the right to surcharge is being contested, that law obviously does not apply to independents. Newark's ordinance originally excluded independent ATM owners. But, Cameron said, "We raised the argument that it was discriminatory to single out an industry when some many others were charging for the same service." The sponsor of Newark's ordinance, Councilman Anthony Carrino, decided to amend his proposal to include non-bank ATM owners. While the same argument was made in Woodbridge, Cameron said, its Town Council opted not to revise their proposal. Tom Matthews, an aide to Carrino, said, "We looked at Woodbridge and decided not to pick and choose. A person should be able to get their money for free from any ATM in the city." Matthews said Carrino introduced his proposal after receiving complaints from senior citizens -- many of them on a limited income -- who objected to paying a convenience fee to access their cash. Independents receive interchange fees just like bank ATM owners, Matthews pointed out. "They're getting paid by somebody, right?" he said. Because many financial institutions choose to recoup all or part of the interchange by charging "foreign fees," customers visiting machines not owned by their bank often pay twice to access their accounts. Former Sen. Alfonse D'Amato coined the phrase "double dipping" to describe the practice. "How many times should an individual be charged for getting their money?" Matthews asked. John Sabel, president of New Jersey ATM Services, an ISO based in Somerset County, is concerned the Newark case "could become a watershed." Independent deployers -- with the exception of giants like American Express -- aren't as well-funded or politically influential as financial institutions, Sabel said. "We're not as well organized. We don't have all of the lawyers. I don't think these cities expect the same kind of challenge from us." Like all deployers, Sabel doesn't think cash withdrawal from ATMs is a given -- despite public opinion to the contrary. There are alternatives, he said, noting that his father writes a check for cash at his bank every week. "It's purely a convenience." Jeff Connor, a former New Jersey Banking Commissioner who is now a partner in the East Coast law firm of Reed Smith Shaw & McClay LLP, said that if Newark wins, independent deployers could be left in a regulatory limbo. Independents' best bet, Connor added, would be to convince the state Department of Banking and Insurance to intercede on their behalf or to approach the state Legislature and ask to be licensed by the state. "They would have to make the argument that they were properly regulated at the state level."