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Banks Defend Right To Charge Non-Customers For Atm Use

If people want the convenience of automatic teller machines, they ought to be willing to pay for it, an executive of the state’s largest bank told a Senate hearing Tuesday.

The Senate Financial Institutions, Insurance and Housing Committee heard testimony on SB5813, which would temporarily prevent the state’s four largest banks from charging customers of other financial institutions for using the banks’ ATMs.

The bill, sponsored by Sen. Dan McDonald, R-Bellevue, is aimed at the state’s “dominant banking institutions,” defined as those with assets of more than $1 billion and a large share of the ATM market. In effect, it would apply to just four banks: Seafirst, Key Bank, U.S. Bank and Wells Fargo. The four control nearly 48 percent of the estimated 4,000 ATMs in the state.

In recent months, a number of banks have started charging fees to people who use an ATM but don’t have an account with the machine’s owner. The fees, usually $1 or $1.50 per transaction, are on top of whatever the person’s own bank charges for using another bank’s machine.

“Just as some shoppers are willing to pay a premium for the added convenience of buying a loaf of bread at the corner minimart, rather than traveling to the supermarket down the street, so too are some banking consumers willing to pay a surcharge for the convenience of using another bank’s ATM,” Stan Carlson, senior vice president of Seafirst, said in testimony prepared for the hearing.

“And just as the state Legislature would never seek to regulate the price of bread, so too should it refrain from regulating ATM fees.”

McDonald said he wants to stop the larger banks from applying the surcharge until smaller banks have time to organize and get on a level playing field with the bigger institutions. Once some time has passed, the Legislature could get out of the picture, he said. The bill mentions no time limit for the moratorium, although one amendment would end it on July 1, 1998.

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