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Update: California ATM-fee bill sails to Assembly floor

July 6, 2005

A California bill that would enable ATM owners to charge transaction fees to non-U.S. card holders took a major step toward passage July 6, when it won unanimous approval from California General Assembly's Banking and Finance committee.

Senator Bill Morrow, R-Oceanside, sponsored the bill, which would close what ATM industry officials say is a corporate loophole that currently discriminates against U.S.-based card-holders.

Currently, any individual using an ATM card issued outside the United States is exempt from paying ATM transaction fees at any ATM located in California.

The proposed law would give California ATM owners and deployers the right to assess and collect ATM transaction fees from non-U.S. cardholders "if they so choose."

Innovus Inc. president J. Michael Brown, who sits on the North American board of the ATM Industry Association, testified before the committee, saying the bill is especially important to small business owners who have purchased an ATM and need to recoup expenses through transaction fees.

Committee members offered no comments on the bill, asked no questions and voted 9-0 to approve the bill.

"I am very pleased, and to be honest, I thought the assembly would be a little more difficult," Brown said. "But the story is just so compelling and the bill just makes so much sense. I think when they looked at the issue, they said they didn't really get what MasterCard and Visa were thinking, but they were going to fix it."

The bill is now expected to go to the full General Assembly for a final vote between July 11 and July 14. If it passes, it will be sent back in mid-August to the Senate for language clarification before going to Gov. Arnold Schwarzenegger for signature.

"Our next step is to educate the governor's staff about the bill, but we are confident that Gov. Schwarzenegger will sign it," Brown said.

He added that when a bill has no opposition in committee, it often is approved by the full General Assembly with little or no debate. "We're feeling pretty good about it."

Morrow shares Brown's optimism.

"I am pleased that the members of the Assembly Banking and Finance Committee unanimously supported SB 389 and I hope that the full Assembly floor vote will be equally as promising," Morrow said.  "I am hopeful that my Senate colleagues and the governor share the views of the thousands of ATM users and owners who have been victimized by this price discrimination."

After the expected passage of the California bill, Brown said, ATMIA will set its sites on other states.

Currently, 13 states permit fees to be imposed to non-U.S. customers: Alabama, Arkansas, Georgia, Idaho, Louisiana, Maine, Mississippi, Montana, Nevada, Tennessee, Texas, Wyoming and, most recently, Washington.

"We really need people to pick up the banner on this. We need to get laws passed next in Michigan, New York and Florida," Brown said, noting that he plans to begin working in Florida next to push for passage of similar legislation. "We had great support from the industry in California, and we need leaders in each of these other states to step up and get this done."

(Read also: Berkeley permit fees could chill ISO business and Lawmakers address inequity in ATM fees)

Included In This Story

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ATM Industry Association (ATMIA)

The ATM Industry Association, founded in 1997, is a global non-profit trade association with over 10,500 members in 65 countries. The membership base covers the full range of this worldwide industry comprising over 2.2 million installed ATMs.

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