STRATEGIC PARTNERS
November 15, 1999
SAN FRANCISCO -- Score one for the banks in California. U.S. District Judge Vaughn Walker granted a preliminary injunction to Wells Fargo and Bank of America, which sued to block enforcement of bans on ATM surcharges in Santa Monica and San Francisco. According to Walker, a ban on ATM surcharges approved by voters in San Francisco, due to take effect in December, and the Santa Monica City Council's ban, which took effect last week, will both likely be found unconstitutional in court. According to the Associated Press, Walker told both banks to put the disputed fees in escrow so that they can be refunded to customers if the city governments prevail. California Bankers Association spokesman John Stafford said the banks were very pleased with Walker's decision and would comply with his escrow order. Wells Fargo and Bank of America, which control 86 percent of the ATMs in the two cities, had closed their machines to non-account holders, in response to the bans. Attorneys for both cities plan to turn to the 9th U.S. Circuit Court of Appeals, which ruled in 1990 that the regulation of bank ATMs is not limited to the federal government. Adam Radinksy, Santa Monica's deputy city attorney, noted that examples of regulation do exist. Iowa and Connecticut do not allow ATM surcharges, and Arkansas, Mississippi and Wyoming set limits on the fees. In Washington, the House Banking Committee rejected a similar ban this year, ordering banks to merely display their fees clearly.
