News

WaMu drops ATM fees in NY, Chicago

September 4, 2003

NEW YORK -- Washington Mutual is counting on the fact that ATM customers in the Big Apple think that ATM fees bite.

In an attempt to expand its market share in the New York area, Washington Mutual (WaMu) is eliminating ATM surcharges in New York and New Jersey. WaMu also plans to open an additional 30 branches in the two states.

According to a Newsday report, WaMu is the first and only major bank in the New York metropolitan area to forgo surcharges.

To inform consumers about the elimination of the fees, Washington Mutual is sending out teams on Sept. 3 to hand out $1.50 in small change purses to passersby in Manhattan and Long Island.

According to Derek Aney, a WaMu spokesman, the bank will give away 15,000 change purses or $20,000 in cash. "It's our way of giving back," he said.

The giant thrift, the largest U.S. mortgager, eliminated ATM surcharges in most of its West Coast markets three years ago and cut the fee last week in Chicago, where it is opening 70 offices this year. It has been hinting that it would drop the ATM surcharge in New York shortly after it entered the market last year when it bought Dime Bancorp for $5.2 billion.

Washington Mutual, which already has 170 branches in New York and New Jersey, is planning to open 30 more by year end, including four in Long Island, five in Queens, two in Manhattan and three in Brooklyn.

Industry experts say that Washington Mutual's move could gain it significant inroads into the highly competitive New York market, where Citigroupand J.P. Morgan Chase & Co. are the industry leaders.

"This strategy of blitzing the area with branches and cutting prices is a smart one," said Richard Bove, managing director/analyst at Hoefer & Arnett, a money managing firm. "It is very difficult for other banks to compete with the bank on pricing."

A number of other large banks, including Bank of America and Wachovia, are making a strong push into the New York market. Wachovia is waiving foreign ATM fees for customers opening personal checking accounts at one of its two new Manhattan offices, and is rebating up to $5 per month to cover ATM fees charged to those customers by other banks. (See related story Wachovia to waive some ATM fees in effort to take Manhattan)

All are making hefty investments in new branches. (See related story Banks on branch bandwagon)