STRATEGIC PARTNERS
November 2, 1999
SAN FRANCISCO -- As expected, San Francisco voters approved a measure to ban ATM surcharges by a wide margin, according to early-morning election returns. Proposition F would prohibit banks, thrifts and credit unions from imposing a surcharge on noncustomers who use their cash machines. The measure would not affect surcharges at cash machines that are not owned by financial institutions. The vote makes San Francisco the nation's first jurisdiction to outlaw ATM surcharges through a public referendum. The states of Iowa and Connecticut and the city of Santa Monica have prohibited the fees through administrative action or legislation. The Massachusetts State Senate passed a ban on surcharges last year, but the measure was halted by the House leadership. Santa Monica's ban is slated to take effect next week. Several other cities, including Los Angeles, San Diego and New York City, are currently considering legislation to ban the fees. San Francisco's measure is scheduled to take effect 10 days after the Board of Supervisors certifies election results. But the banking industry has indicated it intends to fight the measure in court. The California Bankers Association is expected to announce a lawsuit today. Banks say local governments are pre-empted by laws giving federal regulators sole authority over national banks. However, consumer groups say that federal law regarding ATMs allows local governments to impose consumer protections. Proposition F passed despite heavy spending by opponents of the measure. As of last week, the California Bankers Association, Bank of America and Wells Fargo had spent $380,000 to defeat the ban, according to the San Francisco Elections Commission.
