Banks’ New Fees Raise Suspicions

Automated teller machines cost far less to operate than a branch bank building. But that didn’t stop Washington’s biggest banks from starting recently to gouge ATM users with a breathtaking surcharge - often, $1.50 per transaction.

The nature of this surcharge raised a suspicion that the big banks are using it to attack smaller competitors, such as credit unions.

So the Legislature, led by Senate Majority Leader Dan McDonald, a stalwart Republican business backer, is taking a hard look.

Here’s why: For years, the cost of an ATM transaction has been charged to the cardholder’s bank by the bank that owns the ATM. The banks negotiate the fees. So far, so good. Then the nation’s electronic banking networks decided to allow a new surcharge which ATM users must pay if they don’t have an account with the bank that owns the machine.

Since there’s already a mechanism to cover the transaction’s cost, why the surcharge? Smaller banks and credit unions suspect it is calculated to make ATM users switch to the big banks that own most of the machines. If so, is that an antitrust violation?

Small banks and credit unions are a vestige of local service and competition. But if competition lessens, what will happen to fees and service?

Senate Bill 5813 would place a moratorium on the new surcharge while a task force investigates. Good for McDonald for raising a question on behalf of the little guy.

, DataTimes The following fields overflowed: CREDIT = John Webster/For the editorial board