News

Wyoming might kill ATM fee cap

March 9, 2012

Wyoming is the only state in the nation that caps automated teller machine fees by law, but it may lose that distinction soon, said an article in the Billings Gazette.

Supporters say that the state's current $2 cap poses a hardship on ATM operators, particularly those in rural areas. Opponents worry that removing the cap will lead ATM owners to gouge consumers with outrageous fees.

State Sen. Bruce Burns, introduced the bill. He said the ATM cap is unfair to state banks and local ATM owners because nationally chartered banks have been exempt from the ATM fee limit under federal law. Countering this argument, acting Wyoming Banking Commissioner Albert Forkner said almost all of those banks have voluntarily set their ATM fee at $2 out of respect for the state law.

Burns also said many mom-and-pop businesses in Wyoming operate their ATM at a loss because the $2 cap prevents them from recouping operating costs. He said it should be left to the free market, not government, to decide what ATM fees should be. "We don't tell shoe stores what to charge for shoes," he said.

But state Rep. Jim Byrd, D-Cheyenne, questioned whether ATM owners would be reined in by the market. ATM owners already make huge profits from the machines, he said, and lifting the cap would free them to fleece consumers, especially in small towns where there might not be any other ATM for miles. "If you're in some Podunk place in Wyoming, and your car breaks down, you don't have any other options," Byrd said. "The free market needs fences."

For more on this topic, visit our regulatory issues research center.