Washington Mutual Eliminates Surcharges
L O S A N G E L E S, Oct. 10, 2000 -- Washington Mutual will eliminatesurcharges at California ATMs in a move likely to rekindle debateover the amount banks charge non-customers for using theirmachines.
Last year, Santa Monica and San Francisco outlawed ATMsurcharges, which can range as high as $3 per transaction. Theordinances prompted a legal battle between the cities andCalifornia’s two largest banks, Wells Fargo and Bank of America.
“It’s a very gutsy move to move up in the esteem of Californiaconsumers,” said Charlotte Chamberlain, a banking analyst withJeffries & Company Inc. in Los Angeles.
Based on deposits, Seattle-based Washington Mutual is thethird-largest bank operating in California, with 548 branches andnearly 1,000 ATMs statewide.
No Comment from Other BanksWashington Mutual had planned to announce its new policy today, but confirmed plans for the change after word leaked outMonday. Most banks were closed Monday because of the Columbus Dayholiday.
Bank of America, based in Charlotte, N.C., and SanFrancisco-based Wells Fargo are No. 1 and No. 2, respectively. Aspokeswoman for Wells Fargo declined to comment. A call to Bank ofAmerica offices in San Francisco was not immediately returned.
“By eliminating our surcharge, we have a great opportunity toshow potential customers who we are, what we stand for and how weoperate differently from other financial institutions,” said MikeAmoto, manager of Washington Mutual’s ATM network. “We expect toadd new accounts by doing so.”
Eliminating fees will cost Washington Mutual no more than 5cents per share annually, Chamberlain said. Washington Mutualearned $896.8 million, or $1.75 per share, on revenues of $6.53billion during the first six months of 2000.
Bill Ehrlich, a Washington Mutual spokesman, said WashingtonMutual does not charge for ATM service in any other state.
Fees Will Go to CharityWashington Mutual will donate $1.50, the amount it previouslycharged non-customers to use its ATMs, to charity for everynon-customer transaction that occurs between Oct. 23 and Oct. 30.The bank also will make an initial donation of $100,000 to kick offthe campaign.
The money will be given to the California Community Foundation,the San Diego Foundation, the Sacramento Regional Foundation andthe San Francisco Foundation. The groups support a variety ofcauses ranging from education and the arts to low-cost housing andjob development.
Bank of America and Wells Fargo closed their ATMs tonon-customers last year after the Santa Monica City Counciloutlawed surcharges and San Francisco voters approved a measure todo the same.
The San Francisco law never took effect. Santa Monica has beenbattling the banks in court to keep its ordinance on the books. Afederal judge in August gave the city until Nov. 2 to overturn itsprevious action, saying local governments can’t pass laws affectingfederally regulated banks.