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ATM Charges:
Oh, Grow Up
Bank-fee flap brings
out the nanny in state lawmakers
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Business New Haven
2/8/1999
By: Laurence D. Cohen
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What does every economic-development bureaucrat in Connecticut keep saying, over and over and over again?
We have a well-educated workforce. We have a sophisticated workforce. We're not one of those Southern states where nobody has any teeth and a fourth-grade education is good enough to get you a job in the textile mill.
But if we're so damned smart, so proud-of-ourselves sophisticated, who do our elected officials and regulators keep acting as if we're so dumb? Why is it that the attorney general and the state banking department and the General Assembly keep fussing over the insulting notion that we can't decide for ourselves whether to cough up an extra buck or two when we use a bank ATM?
This weighty business of whether non-customers can be charged a fee to use a bank ATM has mucked up two years of General Assembly discourse, has prompted lawsuits, impassioned press conferences by the attorney general and a handful of politicians and “consumer” groups, and has generally branded Connecticut as a state in which the citizenry is too intelligence-impaired to walk away from an ATM that charges too high a fee.
Apparently, only Iowa and Connecticut remain fixated on this ATM thing. A number of grown-up states require ATMs to post fees, or to disclose fees on the screen, before you ask the little critter for dough.
You would think that would be sufficient for a sophisticated state with a very, very, very well-educated workforce. The ATM tells you how much it will cost to spew out some $20 bills, you ponder the cost-benefit of such a transaction, and then you wither hit the button, or go to your own bank's ATM, or slink home and slip money out of your kid's piggy bank.
This battle of the ATM fees has received more attention and more overheated rhetoric in Connecticut than welfare reform and socialist football stadiums, put together. It makes us look like backwater jerks. In the General Assembly has any pride, this is the year to bottle up all the silly ATM bills in committee and kill them before they rise up from the muck and kill another brain cell.
Comedian and satirist Al Franken, author of the new book Why Not Me?, is running a mock campaign to be the Democratic nominee for President in 2000. His major (if not his only) campaign issue? Eliminating ATM fees.
But, you see, Franken is a satirist. He's trying to be funny. New York U.S. Sen. Alfonse D'Amato, who lost his seat last November, was the national champion for banning double-charging for ATM transactions. His Senate colleagues were as bewildered and uninterested in the issue as Connecticut's General Assembly has proven to be, after much anguish and heated rhetoric.
The real oddity in this ATM fuss is that the anti-fee tropps are fighting battle in a war that's already over. The greedy little bankers have gone fee-crazy because consumers just love the convenience of this easy access to cash, without the risk of having to carry around a wad of bills. It's as if Connecticut politicians were protesting the leasing of Xerox machines, because you could sort of get carbon paper for free.
The next generation of ATM technology will offer up all sorts of services, providing convenience-for-a-fee for all sorts of tickets and bill-paying and other paper exchanges. It's not evil, it's not an anti-consumer conspiracy hatched by the cigar-smoking plutocrats at Fleet or BankBoston. It's a new variety of market transaction, chugging ahead while the Connecticut General Assembly ponders whether its citizens should be charged a buck or two for easy access to their money.
The next great banking-fee debate is brewing in Rhode Island, where the state senate is considering a ban on fees for electronic banking customers who defy the computer gods and use a real, live human teller, instead.
The cabal of nanny politicians and sob-sister “consumer” groups that insist we lack the intelligence to navigate the marketplace can't seem to tell the difference between desirable service enhancements and bank fraud.
Proper disclosure of bank fees, written and explained in something other than the Martian-talk that bankers tend to use, is a worthy objective for government to pursue. The knee-jerk opposition to banking services that aren't “free” isn't helpful or constructive.
Laurence D. Cohen is a senior fellow at the Yankee Institute of Public Policy.
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