I hate bank fees. I really, really hate the fees at Bank of America, an evil institution that my wife brought into my life when we married. Bank of America puts holds on deposits for up to two weeks before posting them, but is lightning fast when it comes to charging fees for the overdrafts that their own ridiculous delays cause.
Okay, I’ve vented now. But should B of A and other banks be banned from charging whatever fees they like? Absolutely not. We don’t need laws against nickel-and-dime practices, bad service or inflexibility. We have something called “competition” to take care of that. Other banks will (and do) step up to fill the gap. For example, soon I won’t be doing any business with Bank of America. (My new bank even pays me back the fees charged by other banks’ ATMs.)
Unfortunately, some people don’t trust competition to serve the consumer. They get the idea that every annoyance in life should be legislated away. Hence the attempt by Sen. Tom Harkin, D-Iowa, to limit ATM fees to 50 cents. Fortunately, it failed — at least for now.
Harkin’s bill is a recipe for the disappearance of ATMs everywhere. ATM fees are what make ATMs possible. They pay the storeowners who host them (and often fund them, too), and the banks that fund them. Roll back to 1999, when San Francisco and Santa Monica banned ATM fees within city limits. The ban was eventually struck down in federal court, but in the meantime:
In California, where the conflict began, Wells Fargo and Bank of America fought back by announcing that noncustomers would not be permitted to use ATMs in cities that banned surcharges.
Fortunately, the California ordinances were quickly struck down because they were pre-empted by federal law. So would you like to see the federal law changed so that banks can shut off ATMs everywhere? Or are you willing to pay a small price for the convenience of having access to cash, everywhere and at all hours?