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 Despite a troubled economy and international unrest, bank profits soared past all previous records in 2002. Banks nationwide doubled their previous year's huge increase in profits in 2002, netting more than 90 billion dollars. Net income for banks supervised by the Office of the Comptroller of the Currency rose 28 percent in 2002, up from a 14 percent increase in 2001. (1) While banks
can bask in yet another record-breaking, profit-making year, consumers
face a lot of challenges, including rising oil prices, the uncertainty
surrounding the war and still-high debt levels. (2)
It is against this back drop that NYPIRG conducted its annual survey of
Automated Teller Machine (ATM) fees including the ATM surcharge fee, fees
for foreign (off-us) ATM transactions and debit card point-of-sale fees.
Our research shows that consumers pay costly, escalating fees to access
their own money electronically - while banks further increase their fee
profits.(3) ATMs have become increasingly prevalent in New York State over the past decade. Bank customers have adapted to the new world of banking and become accustomed to using their ATM cards. Banks originally developed ATMs as a way to cut down on expensive teller transactions (4). Indeed, ATMs are tremendous cost savers for banks. Each teller transaction costs a bank about $2.50, while each ATM transaction costs a bank 25¢ - 10% of the cost of a teller visit.(5) ATMs save banks enormous amounts of money because there are no employees to pay and maintenance of an ATM is significantly less than that of a full-service branch. In addition, maintenance of an ATM is significantly less than upkeep of a full-service branch. Recent technological advances may further reduce costs of maintaining an ATM. Web-enabling of ATMs - their retrofitting with Internet-based technologies - are making ATMs cheaper and faster for banks to add new services to the machines and to operate and maintain them. (6) Banks save money when consumers use ATMs but have failed to pass that savings on to consumers. Instead, while customers are using ATMs in increasing numbers, they have been hit with escalating and creative ATM fees. Banks (who own most ATMs) encourage consumers to use ATMs by emphasizing that they are cost savers to consumers and banks and touting the size of their ATM networks. However, savings or increased interest rates have failed to materialize for consumers. In fact, banks have actually made banking more expensive for their customers. Banks are: (1) increasing existing fees, (2) inventing new fees, and (3) making it more difficult for account holders to avoid fees. NYPIRG's 2003 ATM fee survey results show that banks continue to charge consumers very high ATM transaction fees. | |
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