===============================================
NEWS FROM THE LIBERTARIAN PARTY
2600 Virginia Avenue, NW, Suite 100
Washington DC 20037
===============================================
For release: July 18, 1997
===============================================
For additional information:
George Getz, Deputy Director of Communications
Phone: (202) 333-0008 Ext. 222
E-Mail: 76214.3676@CompuServe.com
===============================================
Don't ban ATM fees, say Libertarians:
They actually benefit bank customers
WASHINGTON, DC -- Hate ATM fees? So do most Americans -- but
Senator Alfonse D'Amato's plan to make ATM fees illegal shows that he
has "an account balance of zero when it comes to understanding
economics and the free market," the Libertarian Party said today.
"D'Amato's scheme to prohibit ATM fees -- while appealing in a
populist way -- would be bad for consumers," charged Steve Dasbach,
chairman of the Libertarian Party. "The only people who would benefit
are senators from New York running for re-election, who want to pose as
a friend to the common man."
D'Amato, the New York Republican who chairs the powerful Senate
Banking Committee, has joined forces with socialist Congressman Bernie
Sanders (I-VT) to demand a federal ban on fees for automated teller
machines.
Specifically, he wants to prohibit the fees charged when
customers of one bank use another bank's ATMs. Such fees, he
complained, are "anti-competitive and outrageous."
Not so, says Dasbach: "It's D'Amato's plan that is outrageous --
because it's bank robbery. And the victims will be bank customers."
Contrary to D'Amato's allegations, Dasbach noted that . . .
* ATM fees are voluntary. "Anybody who dislikes ATM fees
doesn't have to pay them," he said. "You have many other options: Use
your own bank's ATMs, cash a check, use a credit card, or just make
sure you have enough cash for your daily needs. No one is forced to use
a bank's ATM machine."
* ATM fees make ATMs more widely available. "Orders for new ATM
machines jumped by 40% last year -- with new machines popping up in
hotels, airports, and convenience stores," said Dasbach. "Why? Because
ATM fees make the machines more profitable -- making it feasible for
banks to put more machines in more locations.
"So, the next time you find a conveniently located ATM machine,
you should thank those ATM fees. It's the added profit that's giving
banks the incentive to provide more ATM machines."
* If ATM fees are banned, they'll just reappear in another
form. "If banks need this revenue, they'll just slip the ATM fees in
through the back door -- via hidden account fees or yearly charges for
ATM cards," predicted Dasbach. "Now, you just pay if you use an ATM
machine. Under D'Amato's proposal, everyone could end up paying."
Dasbach also noted that, according to the General Accounting
Office, only 54% of banks charge ATM fees.
"If D'Amato is correct -- and consumers hate being victimized
by outrageous ATM fees -- we'll see a rush to the 46% of banks that are
fee-free. If consumers really care about this issue, we won't need a
law to fix it -- the market will correct it," he said.
For all these reasons, D'Amato's Republican/socialist plan will
hurt consumers far more than it will help them, said Dasbach.
"If D'Amato has his way, you'll pay a much larger cost than any
pesky $1.50 ATM fee," he said. "You'll have less choice in ATM
locations; less choice in services and fees from your bank; and less
liberty. Even worse, we'll have rewarded a posturing politician like
D'Amato -- and given him more power over our lives. That's too high a
price to pay for eliminating ATM fees."
The Libertarian Party http://www.lp.org/
2600 Virginia Ave. NW, Suite 100 voice: 202-333-0008
Washington DC 20037 fax: 202-333-0072