Remember when you could use any ATM, anywhere and not be charged a fee, even if you didn’t bank with that institution? That was then…
Prior to 2002, Iowa was one of the few remaining states in the country that did not allow financial institutions to create their own network of ATMs. In most other states, two or three banks owned most of the ATMs. In contrast, the top four banks in Iowa owned fewer than 20 percent of the ATMs. Instead, ATMs were to be shared among financial institutions, regardless of size. While your bank or credit union had the authority to charge you a fee after a certain number of transactions, lawmakers put a ban on surcharge fees, thereby preventing the ATM’s owner from charging a fee to non-customers for using their ATM.
In March 2002, a federal court upheld a challenge brought by the OCC and five national banks — Bank of America, Firstar, Metrobank, US Bank, and Wells Fargo — against Iowa’s ATM law. The court voided the ban on surcharges, and WellsFargo and other banks collected almost $5 million in surcharge revenue in the first six months after the ban was lifted.
Lifting the ban on surcharge fees directly affected the pockets of customers/members of local banks and credit unions who did not have ATMs nestled throughout the community. These customers/members were forced to either pay the $1 to $3 surcharge fees at ATM terminals owned by national banks, drive to an ATM owned by their local bank/credit union, or move their accounts to the national banks.
This is now…
Today, you have to be slightly more selective in your choice of ATMs, but locally-owned banks and credit unions have combined resources to expand your options.
Local banks and member-owned credit unions have joined forces with the Shazam Network of ATMs to create an independent network of ATMs, called the Privileged Status Network, that offers customers/members access to thousands of surcharge-free ATMs throughout the nation.
This cooperative spirit among Iowa banks and credit unions has enabled us to combine our resources for the greater good of our customers and members. There is no longer a need to be concerned about banking with a smaller, locally-owned financial institution for fear of being limited to a handful of ATMs — in fact, there are more than 100 Privileged Status ATMs located in the Des Moines Metro area alone… and that number is growing.
To learn more about the Privileged Status Network of ATMs, or to find a Privileged Status ATM near you, visit our website at www.VillageCU.org.
Source: Institute For Local Self-Reliance, ATM Surcharge Bans — Iowa, Nov. 2008.