STRATEGIC PARTNERS
February 27, 2002
SAN FRANCISCO -- A federal appeals court on March 31 upheld a preliminary injunction which has blocked new municipal California laws designed to stop banks from charging non-customers convenience fees for using their ATMs, according to Reuters.
In a unanimous decision, the three judge panel of the 9th Circuit Court of Appeals said U.S. District Court Judge Vaughn Walker did not abuse his discretion last November when he ordered laws in San Francisco and Santa Monica stopped.
Although they had the opportunity to do so, the appeals court justices opted not to rule on the case as a whole, preferring instead to refer it back to Walker's court for a full trial. A date for that has not yet been set.
San Francisco City Attorney Louise Renne said the city welcomed the opportunity to make its case against extra ATM fees in court. "We think federal law gives local voters the right to say that banks can't provide one service and charge customers twice for it," she said.
A spokesman for the California Bankers Association, one of the plaintiffs in the case, said the banks were confident they would prevail in court.
San Francisco voters approved a new law last November that barred banks from surcharging. That ban, which had been due to go into effect in December, mirrored an earlier measure by the Santa Monica City Council.
Bank of America and Wells Fargo reacted by restricting use of their ATMs in Santa Monica to their own customers.
Walker, in issuing the preliminary injunction, said the banks were likely to prevail with their legal argument that federally chartered banks should not be subject to local ordinances.
