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SOUND: [ATM BRANCH SOUNDS] Sounds of entering a branch and using an ATM machine. [FADES UNDER NARRATION.]
NARR: On West 125th street in Manhattan, Harlem resident Lawanna Daniels emerges from a Chase bank shocked by the recent doubling of the ATM withdrawal fee.
ACT: DANIELS-02 TIME: 0:14
It's three dollars now to take cash out, so I declined it. And now I'll do the right thing and go to my bank and take the money out the way I should have in the first place.
NARR: Daniels quickly identifies what she could be doing with that money instead of paying the fee.
ACT: DANIELS-04 TIME: 0:11
That's car fare, one way. There's a number of things I can do. I could give it to my kid.
NARR: Chase says it doubled these fees in order to maintain their network of ATMs. And since last summer, other banks, including Bank of America and Wachovia, have significantly increased their ATM fees as well. But how did we get here? Consumer Attorney Tracy Shelton at the New York Public Interest Research Group explains how low to no fee ATMs evolved into major profit centers for the banks.
ACT: SHELTON 2-02/2-03 TIME: 0:23
ATMs were brought in by banks, okay, as a convenience for consumers, but also as a cost saver for banks. So, off the bat, banks are saving money every time a consumer uses an ATM rather than going in and having a live teller transaction. Well, by assessing these fees on top of that, they've turned ATM fees into total cash cows.
NARR: According to bankrate.com, ATM fees are estimated to generate over $4 billion each year for American banks. And that was before the spike in fees over the last several months.
ACT: SHELTON 1-04 TIME: 0:23
What we've said is that there's a sort of three-pronged fee strategy on the part of banks. One, to come up with as many new fees as they can. Two, to keep raising those fees higher and higher. And, three, to make it more difficult for consumers to avoid paying them. And the ATM surcharge is really sort of the symbol of all three.
NARR: Shelton says those who get hit the hardest are lower income consumers. And this recent round of increases comes at a time of financial distress for many American households.
Her advice to all consumers is to be vigilant about these fees and what can be done to avoid them. She also counsels people to urge their legislators to seek a cap on these fees, something bank customer Jenelle Jackson would like.
ACT: JACKSON-01 TIME: 0:14
I really don't mind because, again, it is a service. There's people that have to handle that administratively. People don't work for free, you know. So a dollar, I don't mind that. But three dollars, that's excessive.
NARR: When a consumer withdraws $60 from a bank and pays a $3 fee, that's 5% just to access one's own money. When it comes to check cashing though, which is another way of getting one's own money, the New York Banking Department already imposes a 1.7% fee cap. A similar cap on the ATM fees charged by banks would result in about a one dollar fee on a $60 withdrawal.
Ivan Dominguez, Columbia Radio News.