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Proposed Legislation Would Ban ATM Fees

By Adam Gorlick

Associated Press

HARTFORD -- The ongoing court battle to determine whether banks in Connecticut

can legally levy surcharges on non-customers who use their automated teller

machines would become moot under legislation being proposed at the state

Capitol.

The legislation would clarify the current law, and ban all such surcharges.

Although similar proposals have failed in the General Assembly for the past

two years, proponents say the law now has a stronger chance of passing. That's

because for a few days in October, Fleet and First Union National banks were

charging $1 to non-customers who used their ATMs.

"It's always difficult to pass legislation in expectation of something," Sen

John Fonfara, D-Hartford, said Monday. "But now people know what it is like to

have a surcharge."

Fleet and First Union were stopped from imposing the fees in Connecticut when

State Banking Commissioner John Burke banned the surcharges.

Burke and state Attorney General Richard Blumenthal have maintained that state

law does not allow banks to impose the surcharges.

The banks are fighting Burke's ban in court.

Rep Robert Landino, co-chairman of the Banks Committee, said he plans to

propose legislation which will strengthen Burke's interpretation of the state

law.

"The bill will just reinforce the law," he said. "It will back up the bank

commissioner's decision."

Proponents of the bill say people who use ATMs are not the only ones suffering

from the bank surcharges.

"Smaller banks don't have the networks to be competitive with larger banks,"

said Frederick Stroiney, president of Windsor Locks Savings and Loan

Association.

He said small community banks could lose business if people join larger

interstate banks in order to avoid the surcharge.

"These surcharges are anti-competitive because they favor the big banks,"

Blumenthal said. "They are anti-consumer because they impact most heavily

middle-income and lower-income people who have to make more withdrawals in

smaller amounts and are charged the same regardless of the number or the

amounts of their withdrawals."

But Gerald Noonan, president of the Connecticut Bankers Association, said it's

not the government's place to regulate bank fees.

"We're not necessarily in favor of surcharges," he said. "But we are opposed

to government regulation of pricing. If people don't want to use the ATMs,

then they won't have to pay for it."