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Atm Fees As Bully Tactic

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by Yves Smith and Felix Salmon
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Sep 14 2007 12:00am EDT

ATM Fees as Bully Tactic

In the literature, the question of ATM fees is generally considered to be a regulatory problem: should they be banned? In the real world, Bank of America has raised its ATM fee to $3. Which is the kind of thing banks can do when they get to be the size of Bank of America: it essentially bullies people into opening an account with you, rather than attracting them with high interest rates on deposits, low interest rates on loans, or good customer service. The ABA comes right out and says as much:

Transaction fees, especially at large banks with ATMs in convenient locations, should compel users to open accounts at those banks to avoid fees, said American Bankers Association spokesman John Hall.

I wonder how many bank accounts John Hall has.

Update: Andrew Leonard has a very enjoyable rant on this subject.

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