West Hollywood Considering ATM Fee Ban
July 7, 2008 - 7:02 PM
West Hollywood (CNSNews.com) - The city of West Hollywood is considering joining Santa Monica and San Francisco in banning automatic teller machine service fees.
Mayor Pro Tempore Jeffrey Prang has asked the West Hollywood city attorney to review an ordinance recently adopted in Santa Monica aimed at ending ATM double charges. The ordinance is expected to be considered at the city council's Nov. 29 meeting.
"Non-bank customers are charged service fees from both their own bank as well as from the bank ATM they access," said Prang. "However, with the near-monopoly control of the banking industry, people have no choice but to pay outrageous and unjustifiable ATM fees."
Prang said the city will monitor the legal challenges to the San Francisco and Santa Monica laws before moving ahead with its own ordinance.
A recent study done by McKinsey & Co., an industry observer, estimated ATM's cost banks more than seven times as much as they save. Additionally, a Federal Reserve study figures banks lose an average of more than $10,400 a year per ATM. The total industry hit for maintaining ATM's, according to the Cato Institute, exceeds $1 billion.
On Monday, a federal judge in San Francisco granted a preliminary injunction barring both cities from banning the ATM charges. However, until there is a final court decision both banks must put the charges into an account until the case is decided.
Wells Fargo & Co. and Bank of America sued the cities on Nov. 3 to overturn the ordinances aimed at doing away with ATM double charges. The banks have objected to the laws, arguing that only Congress has the authority to tell banks what they can and cannot charge. U.S. District Judge Vaughn Walker agreed with the bank's argument, granting the preliminary injunction.
The two banks continue to charge non-customers one or two dollars for handling ATM transactions.