Washington Mutual will eliminate surcharges at California ATMs in a move likely to rekindle debate over the amount banks charge non-customers for using their machines.
Last year, Santa Monica and San Francisco outlawed ATM surcharges, which can range as high as $3 per transaction. The ordinances prompted a legal battle between the cities and California’s two largest banks, Wells Fargo and Bank of America.
“It’s a very gutsy move to move up in the esteem of California consumers,” said Charlotte Chamberlain, a banking analyst with Jeffries & Company Inc. in Los Angeles.
Based on deposits, Seattle-based Washington Mutual is the third-largest bank operating in California, with 548 branches and nearly 1,000 ATMs statewide.
No Comment from Other Banks Washington Mutual had planned to announce its new policy today, but confirmed plans for the change after word leaked out Monday. Most banks were closed Monday because of the Columbus Day holiday.
Bank of America, based in Charlotte, N.C., and San Francisco-based Wells Fargo are No. 1 and No. 2, respectively. A spokeswoman for Wells Fargo declined to comment. A call to Bank of America offices in San Francisco was not immediately returned.
“By eliminating our surcharge, we have a great opportunity to show potential customers who we are, what we stand for and how we operate differently from other financial institutions,” said Mike Amoto, manager of Washington Mutual’s ATM network. “We expect to add new accounts by doing so.”
Eliminating fees will cost Washington Mutual no more than 5 cents per share annually, Chamberlain said. Washington Mutual earned $896.8 million, or $1.75 per share, on revenues of $6.53 billion during the first six months of 2000.
Bill Ehrlich, a Washington Mutual spokesman, said Washington Mutual does not charge for ATM service in any other state.
Fees Will Go to Charity Washington Mutual will donate $1.50, the amount it previously charged non-customers to use its ATMs, to charity for every non-customer transaction that occurs between Oct. 23 and Oct. 30. The bank also will make an initial donation of $100,000 to kick off the campaign.
The money will be given to the California Community Foundation, the San Diego Foundation, the Sacramento Regional Foundation and the San Francisco Foundation. The groups support a variety of causes ranging from education and the arts to low-cost housing and job development.
Bank of America and Wells Fargo closed their ATMs to non-customers last year after the Santa Monica City Council outlawed surcharges and San Francisco voters approved a measure to do the same.
The San Francisco law never took effect. Santa Monica has been battling the banks in court to keep its ordinance on the books. A federal judge in August gave the city until Nov. 2 to overturn its previous action, saying local governments can’t pass laws affecting federally regulated banks.