U.S. SENATE News:
- Large banks shown to have higher and more prevalent fees; Surcharges at non-bank ATMs higher and more frequent
WASHINGTON, D.C. – American consumers have paid higher automated teller machine (ATM) fees over the past five years according to a Government Accountability Office (GAO) investigation released Friday.
Senators Tom Harkin (D-IA), Bernie Sanders (I-VT), Charles Schumer (D-NY), Tom Udall (D-NM), and Sheldon Whitehouse (D-RI) released the GAO investigation.
The lawmakers requested the report to assess increased ATM use by Americans in recent years. GAO estimates that there are 420,000 ATMs in the United States.
According to the report, consumers face two different types of fees when using an ATM. First, consumers can face a surcharge fee assessed by the operator of the ATM.
GAO estimates that the prevalence and amount of ATM surcharge fees charged by financial institutions have increased since 2007 and that the estimated average fee increased from $1.75 in 2007 to $2.10 in 2012.
The report also found that large banks were more likely to charge higher surcharge fees than community banks or credit unions.
GAO’s analysis of a sample of 100 ATMs run by independent operators found that the average surcharge fee was $2.24 and noted that consumers can have a difficult time avoiding surcharges at these ATMs.
In addition, consumers can also face foreign fees for using an ATM not owned by their financial institution, even though their financial institution is compensated for the cost of the transaction through interchange fees.
Like surcharges, the report found that average foreign fees have increased from $1.36 in 2007 to $1.42 in 2012. In addition, GAO found that large financial institutions were more likely to charge foreign fees and charge significantly higher foreign fees than their smaller competitors.
“The number of ATMs has more than doubled in the last 15 years, and as more consumers depend on them for their banking needs, the fees must be fair,” Udall said. “Fees can stack up — especially in rural areas with limited bank access – and paying upwards of $5 dollars per transaction to access your own money is beyond reason.”
“This report makes clear that consumers are facing ever increasing fees to access their own money. A consumer could pay as much as $5 to $10 dollars each time they use an ATM, and these fees could be particularly difficult to avoid in rural and underserved areas. These fees are outrageous, are anti-consumer, and they need to be reined in,” Harkin said.
“It is time for the largest banks in this country to stop ripping off the American people by charging outrageous ATM fees. The greed and recklessness on Wall Street caused the greatest recession since the 1930s. These sky-high ATM fees are only adding insult to injury for millions of consumers,” Sanders said.
“It is getting harder and harder for consumers to access physical branches, so they’re forced to rely on ATMs. I’m disappointed that banks are adding insult to injury by charging – and often double-charging – consumers just for accessing their hard-earned money,” Schumer said. “Banks need to stop nickel-and-diming consumers, and relieve this growing burden on middle-class families.”
“This report shows that consumers can be gouged with outrageous and often hidden ATM fees,” Whitehouse said. “No one should have to pay $5 or $10 in fees just to access their own money, and banks and ATM operators should not be allowed to take advantage of their customers by charging these exorbitant fees.”
The GAO report can be accessed here.