After sitting through two hours of testimony Wednesday, the state committee on Financial Institutions and Insurance was forced to delay its decision on a bill regarding automated teller machine fees until Monday.
The hearing, which took place at the State Office Building in St. Paul, featured a wide variety of testimony ranging from students to big bank lawyers, all attempting to sway legislators on the controversial bill.
Authored by committee chairman and state Rep. Irv Anderson, DFL-International Falls, the proposed bill would prevent the ATM users from being charged two surcharges for one transaction at a foreign machine.
The legislation defines a surcharge as “a transaction fee assessed by the owner or operator of an electronic financial terminal.”
Consumers are being charged twice per transaction when they use most foreign machines, those not owned by their bank. Because of the current system, bill supporters insist that big banks are recording record profits at the expense of needy consumers.
Many legislators and lobbyists claim that the second fee is unnecessary, while bank officials claim it is used to cover costs of operating the automated tellers.
Because of recent amendments, the ban would not include those institutions that own less than two machines and independent retailers, such as a gas station or bar.
Much of the bill and its defending information is based on “The Big Fees Squeeze,” a report released by the Minnesota Public Interest Research Group in December 1997.
The survey was headed by MPIRG activist for consumer and economic rights Lea Schuster and compiled by students from campuses around the state, including several from the University.
“We are not suggesting that banks be denied a profit,” Schuster said in her testimony Wednesday. “We are asking that Minnesota consumers receive certain minimal protections. These protections are especially important for the students I represent.”
Marit Bjordal, a sophomore political science major and student volunteer for MPIRG, was slated to testify, but fell ill.
Although Bjordal was unable to speak, a student opinion was still voiced in front of representatives by Danielle Nugent, a senior political science major from the University of Minnesota-Duluth who also helped MPIRG with the survey.
“As a college student I do not have the money to pay these fees. Please help us gain access to our money without having to pay high and unfair fees,” she said in her testimony.
The proposed legislature naturally met opposition from members of the banking community.
“We are profitable because we offer a great service and take care of our customers,” said Rod Nelson, president of First American Bank. “We live in a society where you pay for what you get.”
“If we pass the bill, we’ll have a change of ownership from those who are regulated to those who aren’t, creating an extra layer of fees,” said John Corbid, director of public affairs for the Minnesota League of Savings and Community Bankers.
Despite the heavy opposition, Schuster remains optimistic the bill will prevail.
“The banks are using scare tactics, most of which are false,” she said. “We were unable to respond to comments made at the last second.”
The bill will be voted on by the Financial Institutions and Insurance committee at 5:30 p.m. Monday at the State Office Building. MPIRG is hoping a stronger student turnout at Monday’s proceeding will leave a better impression in the minds of the representatives.