Saturday, May 15, 2010

ATM Fees

Currently, banks and other ATM operators are free to charge consumers whatever they want for using their machine. And backers of the amendment maintain that those who tend feel the brunt of those fees are lower- and middle-income Americans, precisely those who can't afford it.

Indeed, ATM fees aren't cheap these days. Last year, consumers were assessed $3.54, on average, every time they used an ATM that isn't controlled by their own bank, according to Bankrate.com.


Why is it the Congress' business how much banks charge in ATM fees? Is there now some "right" to cheap access to money whenever you need it? If people often feel the need to get money from an ATM that isn't controlled by their own bank, wouldn't a simple solution be to switch banks? Or perhaps to plan ahead?

Congress should spend less time on issues like this and more time on keeping our government solvent.

18 comments:

ChrisA said...

yea, right! With the problems Congress should be solving no wonder they're looking for distractions and any reason to blow hot air about nothing.

Ronnie said...

Or couldn't the government spend a tiny bit of time on it and make society better? Government only needs to do a few things, but should that stop it from doing things that make the country better?

Mrs. C said...

The same argument could be made for lotto tickets, but no way anyone is going to get rid of those...

Curmudgeon said...

At some point, the line is crossed into usury. Loan-sharking is illegal. A $3.50 fee is average cost of an average withdrawal (or loan) of $50 held for maybe a week. This means 7% interest per week amounts to some 3000% APY.

For the same reason, payday loans are regulated, loan-sharks are illegal, and credit cards and mortgage companies are all based in Delaware and South Dakota because all other states have laws against charging more than ~12% interest on a loan.

The new credit card law also prohibits exorbitant fees on checking and credit card accounts for the same reason.

Darren said...

Making the country "better"? Perhaps you didn't read the article on the *likely* outcomes of this legislation.

Usury is a religious worry, not a governmental one.

On the other hand, why can't grown adults plan better and make their own decisions about where to bank?

Ronnie said...

I think you seriously don't know much about usury. It very much is a legal issue since we happen to have state usury laws according to the California Office of the Attorney General. Now if that is relevant in this situation is an entirely different issue, but the same logic that helped create those laws could easily be applied to the new age of outrageously large fees. I personally don't care whether or not they pass this as law, and I have no idea whether or not $0.50 is a reasonable price for a non-bank ATM fee, but I think it should be in the government's power to regulate this issue.

Oh and on a side note my original issue of "making the country better" was an argument based on my behavior of when not having money and going to a cash only business with none of my bank's ATMs in close proximity choosing to just not buy whatever I was going to. I think clearly my behavior didn't help the economy in that situation.

Darren said...

Ronnie, I ask this in all seriousness: is there *anything* you think the US Congress should be forbidden to do, is there any power beyond its jurisdiction?

Mark V said...

The ATM warns you what it's going to charge you before you use it. If you don't like the fee, go somewhere. Everybody by now should know that any ATM in a hotel or convention center (where you might not have another option) are going to be high. Get your cash before you arrive.

My bank charges me $1 on top of the ATM fee if I use my debit card at a non-bank ATM. I don't particularly like it, but they offer perks in other areas that balance it out.

Curmudgeon said...

The ATM warns you of its fee, usually $1.50, but says only that "Your bank may add its own fee". This fee can be $1 or $5 but this isn't made clear. Your bank may also allow you to overdraw your account without mentioning that you are near the line - incurring a $39 overdraft fee.

I have no problem with a set fee.
I don't mind if the bank said "No."
I wouldn't mind if your bank's fee was spelled out.

I do mind "Surprise!"

MikeAT said...

How about this guys.

When you need your money you get off your dead ass, go down to your bank/SandL/credit union, write out a check to CASH and get the money for no charge at all. I mean, your flat broke at 300am and need a few bucks quick that will work, right?

With an ATM you are paying for a service. If you want access to your money anywhere around the world you will have to pay for the service. Now if you don’t want to pay these fees you can go to your bank’s ATM and not pay them, or as I often do go to Wal-Mart (or another department store or grocery) pay with a debit card and they allow you to take something like 100 dollars without fee.

You need 200..buy two packs of Juicy Fruit, get 100 back on each

Anonymous said...

It never ceases to surprise me how much shit Americans will put up with from their banks. ATM fees, annual fees... its all just amazing to me.

Darren said...

Let's try not to use foul language here.

maxutils said...

The problem isn't really bank ATMs . . . most banks charge 1.50, which isn't horrific. The rally high charges are the ones on privately owned ATMs, of the type that are found in liquor stores and bars in, you guessed it, poor neighborhoods where there are fewer banks.
So, why don't they charge to compete with the banks? a) Because they don't have to, and b) because the only way they make money is by charging fees, unlike banks. So, they have a very different cost structure and revenue stream. Regulate their fees, and they will disappear. It's not a coincidence that all their fees are roughly the same, just as the banks' are. A better solution would be to provide encouragements for banks, and other businesses, to open branches in poor neighborhoods (especially grocery stores, which are frequently lacking and are also providers of transaction fee free cash.)

Ronnie said...

This is in response to Darren's earlier question directed at me.

That is an interesting question. I actually spent quite a bit of time thinking and talking about this with people over the past days. Really Congress should only be able to regulate commerce, finance, physical protection, and property protection. Sadly that's pretty broad and I personally feel ill defined.

Right now it seems like Congress is drawing its own lines and with today's Supreme Court decision of United States v. Comstock the Supreme Court seems to agree with this ability. Since now the Necessary and Proper Clause is both broad and binding I believe the only things Congress can't do are limited by the rest of the Constitution.

The only workable solution to this broadness would be specific Constitutional amendments prohibiting certain actions of Congress, which very well may be necessary if power is significantly abused. Really you couldn't have asked this question at a better time since the Supreme Court happened to answer it earlier today, sadly I don't think it was the answer you were looking for. Ideally I would prefer less power, but I actually think what appears to be the current stance that the only thing limiting Congress is the rest of the Constitution could be a workable solution if reasonable amendments were made to the Constitution.

Darren said...

From what I've read so far, I'm not too impressed with the Comstock decision myself. Not pleased with Kelo, either, and there was another recent one which they completely screwed up (imnsho).

MikeAT said...

"Regulate their fees, and they will disappear. It's not a coincidence that all their fees are roughly the same, just as the banks' are. A better solution would be to provide encouragements for banks, and other businesses, to open branches in poor neighborhoods (especially grocery stores, which are frequently lacking and are also providers of transaction fee free cash.)"

maxutils

If I'm reading you right you want to deliberately put a business out of business. We have enough of that with congress not trying...I shudder to think what they will do when they do try and kill a business. Most members of Congress are not qualified to run a gas station. But more to the point if there was a market for these banks in the small stores in the poor neighborhood, there would be banks there.

Again, if you don't want to use the ATM, don't. Go to your bank and cash a check, or use your bank's ATM or at a department store use your card to pay for a small item and you can get cash back, avoiding the charges….lack of forethought on your part doesn’t necessarily constitute a national issue on ours! :)

maxutils said...

You're not reading me right. I'm pointing out what will happen if you regulate fees -- since the purpose of the legislation was to provide better cheaper access to cash, it would be counterproductive. And put companies out of business . . . I

MikeAT said...

And put companies out of business . . . I

Got ya....and agreed, it would put many companies out of business.