STRATEGIC PARTNERS
November 10, 1999
The Eighth Circuit U.S. Court of Appeals in St. Louis rejected an appeal by the state of Iowa regarding its decision that Iowa can not bar ATM deployments by banks with no branches in the state. The case involved machines deployed in Sears stores as part of Chicago-based Bank One's Rapid Cash program. In their request for an appeal, Iowa Superintendent of Banking Michael K. Guttau and state Attorney General Tom Miller wrote that the court's decision "changes the entire landscape of banking from one of competitive equality to one of competitive inequality, favoring national banks at the expense of state banks and consumers." However, the court found that the federal government has regulatory authority over nationally-chartered banks. While the ruling does not directly address Iowa's surcharge ban, it is significant because of its language favoring the feds. California banks, including Bank of America and Wells Fargo, are using arguments similar to those in the Iowa case in their lawsuit against Santa Monica and San Francisco. Both cities recently enacted bans on surcharges at bank-owned ATMs.
