STRATEGIC PARTNERS
January 17, 2002
SAN FRANCISCO -- A federal appeals court appeared ready on Jan. 17 to kill two California city ordinances regulating ATM surcharges.
During an hour of oral arguments before a three-judge panel of the 9th U.S. Circuit Court of Appeals, the judges appeared unmoved by lawyers defending the ordinances banning those fees in San Francisco and Santa Monica.
"What's the constitutional problem to charge what you want?' Judge Joseph Sneed asked.
Judge Stephen Trott added: "You are asking them to provide a free service?'
In July 2000, U.S. District Judge Vaughn Walker in San Francisco struck down the two ATM fee bans -- one approved by San Francisco voters and another approved by Santa Monica's City Council that year.
Walker ruled that any local ordinances restricting ATM surcharges violate both the National Banking Act and the Home Owners Loan Act, which govern nationally chartered banks and federal savings banks.
San Francisco and Santa Monica argued to the appeals judges that they can ban the ATM charges under state consumer protection laws. The states, San Francisco attorney Owen Martikan said, hold the "right to protect the interests of their consumers.'
Trott later responded: "You're prohibiting what federal law allows.'
The court did not indicate when it would issue a ruling.
