Consumer Pain: Banks Tack On $5 ATM Fees
The nation's largest banks to begin charging higher ATM fees.
March 17, 2011— -- Get ready for big fee increases at your nearest ATM. Some of the nation's largest banks are boosting fees on their automated teller machine networks.
The new fees could be especially costly for people who withdraw cash from another bank's ATM. Chase is now charging Illinois residents $5 every time a non-customer withdraws money from a Chase ATM. That's in addition to any fees charged by the customer's bank.
"Wow. That's steep," says Gerri Detweiler, Credit.com's personal finance expert. "Even if you take out $100 at a time, that's still an expensive way to get at your own money."
Chase also is experimenting with a $4 fee for non-customers in Texas, said Christine Holevas, a spokeswoman for JPMorgan Chase. TD Bank recently stopped reimbursing its customers for fees incurred through the use of other banks' ATMs. Pittsburgh-based PNC Bank did the same for its free checking account customers, a spokesman for the bank said.
The average fee for non-customers using a bank's ATM is $2.60, says Mike Moebs, CEO of Moebs Services, a banking industry research firm.
The changes come at a time of big upheaval in the banking industry. The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed by Congress last year, imposes new compliance requirements that could be costly for banks. It included the Durbin amendment, which would limit banks' income from debit card fees.
[Related: House Debit Card Interchange Hearing Favors Delay]
"The new regulations add up to big money," says Bill Bradway of Bradway Research, a consulting firm for banks. "If the banks don't do anything, their income goes down. So they're looking for new ways to replace that income, and increasing ATM fees is one way to do that."
Other experts doubt banks' arguments that increased ATM fees are a response to new federal regulations. Chase's decision to try higher fees in Texas and Illinois is part of a decade-long trend of gradually increasing ATM charges, Moebs says.
