Senators Push for Cap on ATM Fees

As the Senate debate over financial reform sizzles, credit union non-interest income remains under fire.



Hot on the heels of Regulation E looms another threat to credit union non-interest income, this time in a U.S. Senate amendment to the financial reform bill currently under debate. Congress continued its campaign to bridle Wall Street with an amendment proposed by Sen. Tom Harkin (D-Iowa) on Wednesday that would put the lid on ATM withdrawal fees at 50 cents per transaction, The Wall Street Journal reports.

“Consumers are being charged ATM fees that are well in excess of the cost of providing services, in some instances, as much as $5 per withdrawal,” said Harkin, on the Senate floor.  “These fees are outrageous, are anti-consumer, and they need to be reigned in.”

Harkin casts the actual cost of processing an ATM transaction at approximately 36 cents, while the Federal Reserve lists the average withdrawal fee to be $2.66.  “It’s unfair for people to pay that much to access their own cash,” Harkin said.

What should credit unions prepare for in the face of increasing regulations?  In a recent survey of more than 150 credit unions, Callahan & Associates found ATM fees account for 7.8% of credit union non-interest income. Although such fees don’t quite match the significance of overdraft fees at 28.1% of total non-interest income, credit unions will still feel the loss. In 2009, credit union non-interest income reached $11.6 billion, putting revenue from ATM fees at about $900 million—a hefty sum in today’s tight earning environment.

Want to learn more? Read Passage of ATM Fee Cap Legislation Would “Cripple the Industry”


May 6, 2010


  • Agree or disagree with surcharging, this is no different than the government regulating the price of milk! It is the owner of the ATM who decides what Networks to join and also if, when and whom to surcharge. If a credit union owns an ATM and chooses to surcharge non-members or non-credit union members, then it is their decision and not that of the government. There are literally tens of thousands of ATMs that would go away if this legislation passes. Thousands of people who earn their livelihood through the placement of ATM’s in marginal locations would lose their life savings and livelihood, Hundreds of credit unions who choose to charge non-credit union members to offset the cost of ATM ownership would be forced to either remove their marginal ATM’s or pay to serve bank customers.. It is time for credit unions to contact their Senators before this gets out of hand! We have other real problems, like unemployment, that need to be addressed long before we fix the cost of ATM fees!
    JIM PARK, Pres. CU 24
  • This backlash against fees will have unintended consequences. Ask Senator Harkin how easy it will be to access cash when the number of free standing ATMs plummet. He can also explain to all the NCR and Diebold employees why they are standing on the unemployment line since no one is buying their company's products.....
    Gary Austin VP Operations - Credit Union of America
  • This is another knee jerk reaction out of Washington. It is amazing that we have elected officials that don't understand why they were elected into office in the first place. Where was this senator when Goldman Sachs was getting paid by AIG on the back end with TARP funds?
    Tyrone Burke, Pres/CEO Georgia State University Federal Credit Union
  • I would expect these kinds of reactions from bank executives, but credit union managers? I guess even you guys forgot that Automated Teller Machines replaced ACTUAL TELLERS. Any revenue lost still dwarfs the savings of not hiring people to handle customers' money.

    There was a time when banks PAID people to use ATMs, because they were saving so much money. Some people were initially hesitant because they had relationships with people inside the institution. Get a grip, losers! Anything more than 50 cents is outrageous.

    You want to talk about jobs lost? How about you hire some tellers back? Geez.
    M. Weikel