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Bank Of America Boosts ATM Charges

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Bloomberg News

Published: September 14, 2007

Bank of America raised ATM fees to $3 for noncustomers to boost profit from its network of 17,000 cash machines, the largest in the United States.

The bank is keeping rates lower in Chicago, where it's trying to grab market share, and at public facilities such as airports and train stations, said Alexandra Trower, a spokeswoman for the company based in Charlotte, N.C.

'We invest a huge amount in those ATMs for the benefit of our customers,' Trower said. 'It's for their convenience.'

Bank of America's decision to raise its automated teller machine fee from $2 per withdrawal has spurred increases by other big banks and will boost costs for regional lenders such as PNC Financial Services Group, Pennsylvania's largest bank, and Commerce Bancorp, the biggest bank based in New Jersey. To lure deposits, those companies have agreed to pay customers' ATM fees from other banks.

U.S. Bancorp increased its fees 'in direct response to the pricing in the market by the current market leader,' which is Bank of America, Steve Dale, a spokesman for the Minneapolis- based lender, said. 'They're raising the bar.'

Citigroup, the largest U.S. bank by assets ahead of Bank of America, raised its noncustomer ATM fee to $2 from $1.50 last year and doesn't plan more increases, spokesman Robert Julavits said. Wachovia, also based in Charlotte, has raised fees to $3 in some areas to reflect 'what other banks are doing,' spokesman Michael McCoy said.

Fees are lower where banks face tough competition, said Thomas Kelly, spokesman for JPMorgan Chase & Co., the third- largest U.S. bank. JPMorgan charges $1.50 to noncustomers in the metro New York area, and $2 in most other markets, Kelly said.

Bank of America's decision drew protests from consumer advocates and labor groups, who have asked Congress to hold hearings on bank charges.

'Nobody's saying there shouldn't be fees,' said Lynda Tran, spokeswoman for the Service Employees International Union, which represents 1.9 million janitors, hospital employees and other service workers in the United States and Canada. 'The problem with Bank of America is that, because they're so big, they dominate the market and drive up fees for everyone.'

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