On May 4, Sen. Tom Harkin (D-Iowa) and co-sponsors Charles Schumer (D-NY) and Bernie Sanders (I-VT) introduced Amendment 3812, better known as the Harkin Financial Reform Amendment. The amendment would institute a 50-cent cap on ATM transaction fees, which Harkin said in a press release have become "outrageous" and "anti-consumer."
"First and foremost, Senator Harkin is interested in consumer protection," said Harkin spokesperson Bergen Kelly. "These costs no longer bear relation to the cost of processing transactions."
Perhaps not surprisingly, ATM and financial transaction trade organizations have voiced strong opposition to the amendment.
"It's just very misguided," said Electronic Funds Transfer Association (EFTA) president and CEO Kurt Helwig.
"While this sounds attractive, the reality is that such a price control will make many ATMs uneconomical and will lead to a dramatic reduction in the number and availability of these terminals and stop any production and distribution of new terminals. This will mean greater inconvenience for consumers and fewer choices," wrote the American Banking Association (ABA) in a letter voicing opposition to the amendment.
One major point of contention is the amendment's evaluation of the cost of an ATM transaction. While Harkin, in a press release, states that the cost of a typical transaction is no more than 36 cents, Helwig notes that that figure is based on a study conducted in 1997.
"It's particularly dated," he said, "and doesn't take into account the cost components of an ATM." The cost of off-premise rental, machine maintenance and armored car service for cash handling all add additional costs beyond Harkin's estimate, Helwig says.
According to the ABA, which has joined forces with ATMIA, EFTA and other financial groups to oppose the amendment, the fee cap would force many ATM providers to close their more remote locations.
"A price cap on fees will mean that there will be fewer ATMs available — for both customers and non-customers of a bank — and thus, fewer choices," stated ABA.
Helwig suggests that if ATM fees were exorbitant, that market demand would have already forced deployers to lower them.
"Consumers have shown they demand convenience and are willing to pay for convenience," he said.
Kelly says Harkin and his co-sponsors hope to have the amendment on the Senate floor in the next few days.
"We've got some good sponsors," she said.
Helwig, from the other side of the issue, says he's optimistic that the amendment may not even reach hearings, much less a vote. He notes that there are less than two weeks to the Senate's Memorial Day recess, a deadline Harkin and his co-sponsors have suggested for putting the bill in motion.
"I'm hoping they won't even get a vote on it," he said.
And according to Kelly, the amendment may have the desired effect on the issue of ATM fees, even if it never becomes law.
"Even if it fails, we've started the discussion," she said.
