Shot in the Foot Again

Picture this: A group of diehard credit union supporters is sitting around a table trying to think of ways to make banks look bad (this is hypothetical, of course), and one of the group says, They're already getting bashed over fees; too bad we can't get them to add a new fee for using their ATMs, you know, a surcharge. Don't be silly, the others say, they'd never do that. Okay, before you start wondering whose side we're on, let's get a couple of things straight. We're not against ATM surcharges and we're not in love with credit unions. In a free-market economy a bank or any other company can, short of a few proscribed practices, charge anything it wants for a service. But because you can do something doesn't mean you should. An airline can charge a fee for the snacks it serves on flights, for example, but should it? As the cover story explains, Visa and Mastercard repealed bylaws that had prohibited an ATM-owning bank from charging the customer of another bank a fee -- a surcharge, distinct from the interchange fee. Surcharge is like a waving a red flag in front of a bull when it comes to people already annoyed by fees. As one bank public affairs officer put it recently, How did we get to the point where we have members of Congress and the media accusing us of `double dipping'? Charging noncustomers a small fee to use their bank's ATM seems quite reasonable to most bankers. We don't disagree, but we've also discovered in conversations with people that this debate cannot be won on logic; there is an emotional element to it. A typical dialog goes like this: You're charging me to get to my own money, even though up till now ATMs have been free, and even though you've been installing ATMS for years and telling me that they're a much less costly way to handle routine transactions than by using human tellers. I know you're already making money on my money from the interest you earn by loaning it out, and from the checking account fees I pay. Etc. Not everyone feels this way. If you ask an above-average-income person about the issue, they are much more likely to be sanguine about it because they seldom pay bank fees. But consumer groups and Congress and the media are not speaking about or for such people. They are speaking about the low-to-moderate income people who are more likely to be paving fees. It's true that many consumer spokesmen are self-appointed and have their own agendas to advance at the expense of banks. But it's also true that banks keep lofting pitches right over the plate to these folks, who rarely miss the opportunity to smack one over the fence. …