Riding the heels of consumer outcry and published reports, state legislators announced plans Wednesday to introduce a bill that could dramatically alter automated teller machine surcharge fees.
The group of legislators, which included Attorney General Hubert “Skip” Humphrey III, House Speaker Phil Carruthers and House Majority Leader Ted Winter, gathered at the state Capitol to begin their crusade against the three big banks in Minneapolis — First Bank, TCF and Norwest — and their use of surcharge fees.
“For large banks, ATMs are the cash cows, or cash wolves, of the 1990s and the consumers are the sacrificial lambs,” Humphrey said. “These surcharges simply aren’t fair, and it’s time to stop banks from picking the pockets of consumers every time they use an ATM.”
The politicians were joined by Lea Schuster, a consumer and economic rights advocate for Minnesota Public Interest Research Group. She was asked to speak on behalf of students and in light of her involvement with MPIRG’s study “The Big Fees Squeeze.”
The study, released in early December, analyzed many facets of bank fees, but concentrated on ATMs. Hailed as the most comprehensive of its kind ever written in Minnesota, the report uncovered exact amounts of surcharge and foreign fees charged by teller machines state-wide.
“What this means is that by the end of this year we have a much stronger chance to have legislation banning surcharges,” Schuster said, “which means students will have cheaper access to their money. They won’t be (vulnerable to) big banks like they have been in the past.”
The study found that 100 percent of machines owned by the three big banks charged the consumer for use. Of all machines across the state, 53 percent of them are owned by the three big banks.
Schuster said the surcharges affect students tremendously because of their fixed and low incomes. Most students only take out $10 or $20 at a time and are charged for every transaction. Also, because so many students come to school from out of town and bank at home, they are susceptible to the foreign fees charged by many machines, she said.
“It boils down to this: Banks win, consumers lose,” Humphrey said.
Kevin Chandler, president of the Minnesota Credit Union Network, also joined the press conference, unveiling a decal that will alert consumers of surcharge-free machines owned by the nonprofit credit unions. He also announced a radio ad campaign to raise awareness of the surcharge issue among the public.
“Banks are taking advantage of ordinary working families who simply want access to their own money,” Chandler said. “They have customers by the throat.”
However, Norwest spokeswoman Teresa Morrow said the ATM fees are needed to maintain utility costs of the machines.
Neither TCF nor First Bank officials returned phone calls for comment.
“For low and middle income families, ATM charges often constitute a burdensome imposition,” Carruthers said. “Many of these families earn only a few dollars of interest a year. These fees and surcharges essentially take back the few dollars earned by families on their nest egg.”
Schuster said that right now students can either go to a human teller or they can pay the fee. “There is really not a lot of options,” she said.
Iowa and Connecticut are currently the only two states that have passed similar legislation making the surcharge fee illegal. Currently, close to 30 states have related bills pending legislation.