A Bailout Proposal: No More ATM Fees

Here's what I really want: no ATM fees. Ever again. Ever. I can happily blow $5.00 on a McDonald's double cheeseburger in Times Square, but the $3.00 I am charged by Bank of America to use their ATM as a non-customer will leave me feeling sour the entire afternoon.

And it seems only fair that as one of three hundred million people helping to cover this massive banking bailout, I am entitled to my $3.00.

Everyone says the bailout needed to happen, maybe still needs to happen more, and I guess I believe them. I heard a man on NPR yesterday argue that you could attribute the Renaissance to better banking policies and more available credit in Florence as easily as you could to DaVinci or Rembrandt. So, hell, let's just go ahead and pull out the national wallet and give banks a few hundred billion dollars. I like a good renaissance.

But the initial frustration - this was some time back when voters were still reluctant to bail out enormous banks - with the plan is pretty easy to trace. To phrase that frustration in its simplest form: banks suck.

How do they suck? Well, here's a personal example: I wrote a check that should have bounced... Definitely my mistake. Washington Mutual was happy to cover my check and the two purchases (a total of $2.00 for a candy bar and a soda) I had made on my debit card over the weekend. But it cashed the check first and then processed the debit card payments and thus justified charging three overdraft payments rather than one. So my soda and candy bar cost just over $70. This wouldn't have happened if I hadn't screwed up in the first place, so I paid the fees but then asked to close my account because I didn't want to do this again: a Snickers isn't worth $36 to me.

Then, in a narrative familiar to anyone - pretty much everyone - who deals with his bank regularly, the bank explained that it couldn't close my account unless I stopped into my home branch. My home branch is in Chicago. I live in New York. I explained this. Brandon, the branch's representative, looked through the impossible protocols that the bank imposed on anyone wishing to close an account and, after half an hour of negotiations, assured me that they would figure it out if I could stop into a local New York branch and try to close the account from there. I did this and assumed I was in the clear. Two months later I was informed by mail that my account with Washington Mutual was in arrears. I called the bank and explained that my account couldn't be in arrears because I didn't have an account. They told me that I had to stop into my home branch in Chicago to close the account and that my health insurance had drafted money in the meantime. They were charging me another $70 for covering this draft. I asked to speak to Brandon. Brandon no longer worked there. I called my health insurance. They apologized for a drafting error and assured me they would do no such thing in the future. I called the bank again. They assured me they would be happy to close my account if I could only make it into the branch... I called the bank teller's supervisor, the national hotline of the bank, the main Chicago office. This went on over a period of months and I eventually paid whatever overdraft fees they were charging in exchange for the assurance that my account would be closed and I would receive verification of its closure by mail. That was four weeks ago. I'm still waiting.

But no need to take my personal example. I don't think I'm alone when it comes to infuriating experiences with a bank or its representatives. Most people who are not themselves tellers, and some people who are, have wanted to throttle a bank rep at some point. Maybe it's the six dollar 'bill pay' fee or the 5% charged on currency transfers or a double charged overdraft fee or the $25 fee for letting your checking account drop below $100 or the $30 dollar fee for letting your savings account drop below $200, or it might be the ATM fees. These banks are theoretically making money by lending some portion of my checking or savings account to people at interest, surely they could drop some of these fees. And the ATM's are an egregious example.

ATM's save the bank money, after all. Through the use of automated tellers, they do not need to hire as many actual tellers. They can pay fewer salaries. So it's a complex contortion of logic that makes most banks feel they really ought to charge their customers more for ATM use. It's grossly counter-intuitive and it's pretty much standard industry practice. It's as if you went out to dinner with a friend and said "well, I just got a huge raise, so tonight dinner's on you!"

So back to my modest proposal for the bailout bill: no more ATM fees. I think it's only fair that as a small gesture of good will to the irascible taxpayers who have to foot the bill for the colossal financial screw-ups of extraordinarily well paid bank officers, any bank that accepts federal bailout money is no longer allowed to charge any fee for any ATM in its control. That's no fees for customers of WAMU using banks other than WAMU and no fees for non-customers of WAMU using WAMU ATM's. The customers win; the money saved is progressively redistributed (a $2.00 fee means a great deal more to someone making $35,000 a year than it does to a bank or its employees); and it's a small spoonful of sugar to go with the ugly medicine of this bailout package. Plus, if enough banks take federal money (and who wouldn't want federal money), we really might look at paying no ATM fees ever again. Ever.

Comments

[laurenf]

ATM fees have been blown out of proportion. I've seen transaction costs of about $.27 -- not even close to the $4-5 you pay for using another bank's machine. Yuck.
In other words, you can skirt the fees by using your debit card to buy a small something and asking for cash back: http://blogs.southtownstar.com/money/2008/12/save_money_on_fees.html

[jmpurser]

YES!!!

The ATM fee scheme is the banking industry charging the public for SAVING THE BANK MONEY!!!

[RightWingMarine]

if you don't like the fees your bank charges or ATM fees you can go to another bank. If it is inconvient to close an account, just abandon it. If you don't want to pay the ATM fee, don't use their ATM.

[tailgateshirts]

I hate those damn fees, waste of $5 every time i need to get money from somewhere. That would be nice since if they all charge the same fee... i doubt it costs them nearly the amount to process it.

[Samalabear]

When you're running close on your account -- yes, it's happened to me many times. I once had a check of around $50 bounce because I was a small amount shy -- around $2. I found out later the overdraft only occurred because my paycheck hadn't yet cleared, supposedly. I had around 20 good checks of smaller amount behind that. However, they bounced this one check $50 and then it became a cascade of all the smaller bounced checks -- some as low as $5. I believe the fees for that 24-hour nightmare came up to $1,200. I could not get the money in there fast enough to cover the fees and stop the bleeding that was caused by the first overdraft charge of $30.

Today, several years after this incident, I am with BOA. I never use ATMs and I never write checks. I just don't trust that something could go wrong. They play with check deposits and they play with your checks, believe me, to get the biggest bang for your buck. I opened my BOA account two years ago and $17 a month is all I have paid. As of last week my account is free for my small business account - new program, yeah.

[unite4change]

These banks are like Jesse and Frank James, they rob you at will and nobody protecting the us. My things have really changed since 2000. The Bush Administration certainly didn't like working people.

[Samalabear]

This is how it's stacked against working people:

Banks love it when people overdraw their accounts. They know that for most people it is a mistake and they will make good on the checks and so the banks make out like, well, bank robbers. The wealthy don't pay fees -- they get interest. So we pay the banks enormous fees and they in turn give our money to the wealthy. Sounds like reverse Robin Hood to me.

We are indeed sheep to continue putting up with this. I hope Americans will start becoming less complacent, because we have not been complaint -- just sucking it up day in and day out.

[robinhood81]

Thank God someone is finally addressing this, for all of us paycheck-to-paycheck people! The ATM fees are annoying but, like other commenters, I'm much more peeved about the overdraft fees... a little automatic overdraft protection for a small ( perhaps

[mbaty]

Your proposal is modest. I would start by demanding that banks overhaul the way they do business. Why should a $5 transaction that goes over the amount in the account be charged $35? Why can't they decline the transaction--or better yet, charge 35% of the amount overaged? Because they are not here to serve the people, they are here to make money, and that's where the corruption begins. Fees and charges for almost everything. When I go to Wells Fargo to cash a Wells Fargo check, they want me to pay them $5, when that's not what I was promised, namely, the full amount of the check. How is that in any way morally right? I've decided not to use banks that have 1.Predatory practices and policies and/or 2.Deceptive policies and practices. As you can guess, I haven't found a bank yet that fits the bill. U.S. Bank is now trying to sue me for the excessive overages they charged me and which they continued to charge me after I closed the account, or rather, after I was assured the account was closed, which it hadn't been. What would the economy look like without deceptive mortgages? It would be in much better shape. ATM fees should be just the beginning if they want bailed out by the government while continuing to suck every dollar from their individual patrons. We need to demand integrity in these financial institutions.

[LeftRight]

I'm sorry that US Bank did that to you (my wife works there, and I've not had any problems with them except one and that was cleared up easily) but since you are having such troubles maybe you should find a Credit Union. The shareholders of a CU are the people with accounts, so they tend to charge less interest, pay more interest, not be ridiculous about fees, etc....

[joebhed]

Of course the fee schedule of any bank should be on the table at any time, crisis or not, loan or not.

Bailout proposals that are properly aimed can actually have an effect on the real economy of so-called Mainstreet.

My proposal goes like this.
If any bank that gets bailout money also has a credit card operation, then this bank must buy out that debt for its cardholders using the bailout money, and then resorting those loans for repayment at the banks average cost of money terms for those obligations.
That would take a huge stream of debt out of the budgets of those consumers, which would restore an equal amount of funding to the pocketbooks of the consumer side of the economy.
Where it is needed.
That's how it might work if WE THE PEOPLE made the rules.

[bbednarz]

.Banks are wonderful institutions....D U H....
I deposited cash on a Friday Afternoon before 3:00 PM....(cash is an immediate deposit - no waiting time for it to clear)...On Saturday I wrote and mailed a check -.- Monday Morning I received an overdraft notice that the bank was billing me $35.00 for un-collected funds -.- An everyday occurance for people -.- They were indignant that I refused to pay -.- and that I would notify the banking and insurance commission....GEE, The FEES WERE CANCELED..........BUT did they pay me for my time ?.?.?
.
..Banks do not lose money !.! They will give you 4 or 5 % on your savings while charging you 22 to 30 % on your credit card..............Motgage THIS COMPOUND INTEREST...........you pay more interest than the loan itself (not fraud -.- they're losing money?.?.?).
THE DISCOVERY OF ANOTHER FRAUD -.- I mean after the JUNK-BOND FRAUD......The Banks Didn't Lose -.- Only The People...... ENRON, who lost?.? Worldcom, Who Lost ?.? Tyco, Who Lost?.?.?
.
...FRAUD perpetrated this time in WASHINGTON -.- AGAINST THE PEOPLE....................Wall Street.........Sally Mae..........Freddie Mac.............the big (?????) three auto "assemblers", who years ago started shipping jobs overseas........... Foregoing one year's bonus is going to fix everything isn't it ?.?
...Or WHY in this time, fiscal diaster did the "TRAITORS" in Washington tack on an additional $110 Billion Dollars For Their POCKETS -.- oops I mean pig, oops I mean PORK PROJECTS.....FINANCIAL CRISIS ?.?.? FOR THE LITTLE PEOPLE ONLY..............F R A U D

[Peter007]

Nicholas, I feel your pain. Dealing with a large institution has become a nightmare for most of us. The laws on the books seem to fit a society whereby you live in your little town with a small local bank and if there is a dispute, you can take it to small claims court for $10. You can get reasonable justice. Now the mere size and scope of institutions we do business with put the individual at a disadvantage. They are not people we can see but characters on a computer screen. "They" are out there in cyber space as menacing as a computer virus. My solution is more small claim courts where by if you have a problem, Bank of America has to come down and defend themselves. Justice for the little man.

[Badbone]

Here's what I want. Free money. As long as people like the author are advocating using the coercive power of government to force private companies to do whatever he likes, why not go all the way?

From now on, any bank I walk into must give me free money. And the teller better be cute. And naked. And I want a sandwhich.

Government does not exist to make you slightly more comfortable. Don't like ATM fees? Go to a bank that doesn't charge them. Asking the government to gang up on a company practice you don't like, now that's closer to evil.

[LeftRight]

On the other hand the whole purpose of a govt is to make our lives better. Since this govt is choosing to spend VAST sums of money to ensure that banks aren't going under, it's a reasonable request that they not charge outrageous fees to the very people bailing them out!

[mlaiuppa]

This is why I no longer "bank". I've been a member of my credit union for almost 30 years. As a "member" they do all they can to correct any "mistakes" that are made.

When I first looked at opening an account I went to Bank of America. They were rude and weren't very helpful. I don't need to be treated like dirt when I ask a few questions. I expect answers, not condescension. So I went elsewhere. When my credit union started offering checking accounts, I went there.

Bank of America bought out my credit card company. I closed that account. My credit union started to offer a fixed rate credit card, I switched to my credit union's card. My credit union offers everything a bank does and more. I do all of my bill paying, direct deposit etc. online. I have total access from home. And when I go to the branch, they know me there.

Bank of America has now bought the company that holds my mortgage. I was going to refinance before the economy went sour. I may still do that as soon as I can. And this time I'll refinance through my credit union. They won't sell my mortgage to anyone so I'll finally be free of Bank of America.

[LeftRight]

I tell you what, if *I* had that bank, I woulda told them to just go to h-e-l-l about those fees!! And I'm SO tired of banks deciding to REMOVE money from your account before the direct deposit comes in!!!

[cktirumalai]

The Italian Renaissance certainly had its less desirable aspects, from worldly Popes, some of whom had illegitimate children, to the poison-and -assassination-methods associated with that "realistically" formidable Florentine, Machiavelli.
As one of the other posters says, banks are okay so long as you play by their ATM and other rules, but there is hell to pay if you side-step or violate them. I must add, however, that when I threatened to cancel my account if my bank did not rescind the very steep fees it imposed because I had exceeded the number of telephone transfers allowed during a period from one internal account to another, done on an automatic line, it cancelled the fees, not wanting to lose a customer.