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ATM customers: Beware when going to other banks’ ATMs for quick cash, now that a new law has been signed by the president.
The bill — The Electronic Fund Transfer Act — was signed last week after unanimously passing both the Senate and House. It has an amendment that allows banks to take down the out-of-network fee signs.
The bank is still required to alert you on the screen what fees will be charged, but consumer advocates say that the measure will lead to more fees being generated by banks, at a time when they are looking for revenue.
“This is a great achievement for EFTA,” according to Kurt Helwig, president and chief executive of the Electronic Funds Transfer Association (EFTA).
“They will still be warned on the electronic screen that they will pay a fee; it is just that the banks will not be required to have a physical sign warning them, although some banks continue to do so,” says John Hall, a spokesman for the American Bankers Association (ABA).
Helwig added that other financial groups also had supported the measure. However, Tom Feltner, a spokesman for the Consumer Federation of America, said the group “took no position” on the measure.
Still, several other consumer groups said the dual-notification provision should stand.
“Physical notices on ATM machines are necessary to inform consumers that they may be assessed a fee prior to using the machines in any capacity,” wrote Michelle Jun, senior attorney for Consumers Union, in a letter to the Senate on behalf of a trio of consumer groups. She warned that “without this posted sign, a consumer may engage in the transaction before knowing the fee.”
And what’s the damage for not using your bank? The average out-of-network fee is now $1.57, which is up 11 percent from last year, according to BankRate.com. The owner of the ATM is paying $2.50, which is up some 4 percent from 2011, says BankRate.com. A card-industry observer said these charges can be significant over the long term.
“It may not seem like much, but over the course of a year these kinds of charges can add up to $90 or more,” says Bill Hardekopf, founder of LowCards.com.