Taking on the banks, $5 at a time: Clinton, Sanders target ATM fees
Yahoo Photo Illustration/Getty Images/AP
Hillary Clinton said a lot of things on The Late Show With Stephen Colbert this week about her economic proposals.
But it was one comment, which her campaign aides say was unscripted, that might have the best potential to catch political fire: a call to rein in galloping ATM fees.
The Democratic presidential frontrunner checked several progressive boxes in the Tuesday night appearance. She enthusiastically expressed support for letting big banks fail in the event of another financial meltdown (“yes, yes, yes, yes, yes, yes, yes!” she said when Colbert floated that possibility). She promised to do more for the middle class. She touted her husband’s economic record in the 1990s. She insisted that “the wealthy need to pay more” in taxes. She promised to expand on President Obama’s record. She knocked Republicans. And she name-dropped Paul Krugman — “you know, the columnist for the New York Times, Nobel Prize-winning economist?” — and cited his support for her plan to reform Wall Street.
“Can you at least just get back from them the $3 they charge us to take $20 out of an ATM machine,” Colbert said, drawing laughs from the audience.
“You know what, we need to go after that too, don’t you think, yeah, yeah, it’s usurious,” Clinton replied.
Yahoo News contacted several Clinton campaign aides, none of whom expressed familiarity with the comment, making it clear that it was off-the-cuff. And her economic plan does not call for any specific steps to tamp down the ATM fees that consumers pay when they complete a transaction at an out-of-network machine.
If she were to follow through, though, a push to hold down ATM fees could put her sharply at odds with big banks, with private companies that run ATMs, and with other financial institutions, perhaps even more so than anything else she has proposed.
American Bankers Association officials would not comment on the record. But David Pommerehn, senior counsel and vice president of the Consumer Bankers Association, told Yahoo News by telephone that the public has a distorted perspective on ATM fees.
“What gets lost in the mix is that a lot of ATMs are privately owned,” and not run by banks, he said. Moreover, “ATM networks are expensive to maintain,” and fees help banks “cover the cost of maintaining those networks,” he said. Consumers who go to out-of-network ATMs are paying for convenience, Pommerehn said.
The idea would, however, line Clinton up neatly with her closest rival, self-described Democratic Socialist Sen. Bernie Sanders of Vermont. Sanders has been battling banks on that turf for decades in speeches and legislation dating back to his days in the House of Representatives.
“Sen. Sanders has been fighting against sky-high ATM fees since 1996,” his policy director, Warren Gunnels, told Yahoo News by email. “As president, Sen. Sanders would make it a priority to stop big banks from charging these outrageous fees.”
Whether they are outrageous or merely the price of convenience is a matter of debate. But they are certainly soaring. A survey of 25 major markets released in early October by the financial services company Bankrate found that the fees have climbed 21 percent over the past five years, to a national average of $4.52 per transaction.
In Clinton’s adoptive home state, New York City comes in as the second-priciest, at $5.03, just behind Atlanta at $5.15. Washington, D.C., comes in at $4.64 while the liberal bastion of San Francisco was the cheapest of the 25 markets at $3.85. (The amount combines what ATM managers charge and what a person’s home financial institution charges.)
There’s no data for the states that host the first two primaries: Iowa and New Hampshire.
But it’s possible that Clinton is taking a page from one of her most prominent backers in Iowa, Democratic former Sen. Tom Harkin, who led the charge in 2010 to cap ATM fees at 50 cents. His amendment to what became the Dodd-Frank law to reform Wall Street never got a vote — undone by bipartisan opposition.
“The most shocking part of this fee is that, on average, the real cost of processing a transaction today is only 36 cents or less. Where does the rest of the money go? It is going to the big banks, the big card networks and independent machine owners,” Harkin said during that fight.
