NPD's Looking To End Fees on ATM Withdrawals

This is an issue that probably frustrates us all from time to time, but never really one that I paid too much attention to. Any time we go to withdraw money from a bank machine, other than our own, we are charged anywhere from $1.50 to $2.50 or $3. It does seem to be a bit much when you think about it. On some ATM's, I can withdraw $20 and it may cost me $3 to do so. With a profit of $19 billion dollars in one year, I would agree that it seems something can and should be waived.

Ideally we can all make it to our own branch and avoid these costs. But it is not always the case. My girlfriend and I have different banks. I'm with ScotiaBank and she is with the Royal Bank. Her back is much closer and not very far out of the way, while mine is slightly out of the way. Between red lights and one way streets, it is a huge pain in the ass to make it over to my bank. So most days I just end up withdrawing my money from her bank. I would be surprised if it were more than $10 a month that I allowed, but still, others have had more drastic experiences.

I had set up my mother's online banking a few months ago when I was home for a visit. I looked through her history, and in two months she had been billed over $90 on charges alone. She had moved in with my grandmother after a few passings in our family, and since I moved away they have no means of transportation. All of their income is direct deposit which can be a burden. Rather than paying over $10 for a cab down town to get some money out, and then home, they prefer to walk up the road to the local establishment and retrieve money from the ATM. I believe the establishment charges $1.50 and the bank itself charges the same. So that is $3 for every withdrawal. Between the two of them, these add up very quickly. My grandmother, a senior citizen, on a fixed income is forced to give up a hefty percentage of her pay every week in order to withdraw this money.

In the summer months, they are known to walk to town quite a bit. But it is not much of an option throughout the winter.

Now that my "little rant" is over.. I'll link up the article.

NDP calls for end to fees on ATM withdrawals

ORONTO -- Charging people to use automatic teller machines from a bank other than their own in order to access their own cash is a rip-off that should be outlawed, New Democrat Leader Jack Layton said Thursday.

In what Canada's big banks dismissed as little more than a display of ignorant rhetoric, Layton said the $19 billion profits the financial institutions made last year should be enough to waive ATM convenience fees.

"We believe it's gouging when a person comes up and they want $40 or $60 of their cash and a bank is charging them $1.50 or $2, $2.50," Layton said during an election-style announcement on a Toronto street corner.

"That's a rate of payment which is very, very high - and unfair."

New Democrats will bring forward proposed amendments to the Bank Act, which is currently under review, to prevent banks from charging fees to customers who withdraw, deposit or transfer their own money through bank machines, Layton said.

He estimated banks make $420 million from charging people to withdraw cash from ATMs.

"Ordinary families work hard for their money," Layton said as he braved the city's coldest temperatures so far this year to stage a news conference at an outdoor bank machine.

"If they want to take a few dollars out to go to the grocery store, the banks shouldn't be keeping $1.50 or $2 or any of that money."

Link to Article

From ATM's alone they are turning a profit of $420 Million. Is that reasonable?

Business sense tells you that any service is going to come with a charge. I am not against that. But $2 and $3 for every transaction is a little much. I have little sympathy for banks and would love to see these costs abolished, but I would be shocked to ever hear of it.

I commend the NDP's and Jack Layton for bringing attention to the matter. In my opinion, it is a constant nuance that most of us have come to accept.

[edit on 27-1-2007 by chissler]

You won't hear much sympathy for the banks from me. I remember before there were ATM's and you actually had to go to the bank during business hours if you wanted your money. When the ATM's were introduced, they cut back their staffing levels. These machines pay for themselves in recouped wages. Heck, my bank charges me for in-branch transactions because they have to have tellers if you actually go inside.

I can kind of understand the concept of charging someone who banks at another bank to use your machines, because they are providing a service to someone who is not their client. I don't agree with your own bank charging you on top of that.

I don't think the bank fees are going away anytime soon, if ever.

Originally posted by Duzey
I don't think the bank fees are going away anytime soon, if ever.

I would have to agree with you on it. But I think the stance Layton and the NDP's have made is quite noble and may bring some much needed attention to the matter. I would agree to a charge, as any service normally does come with a charge, but the current one is far to high in my opinion.

A side question, can the government step in and dictate how the banks operate? Can they decide where, when, and how much of a charge the banks place on transactions?

I'm pretty sure the government has no jurisdiction over the banks. That would require legislation we don't have.

$3 is high to take $20 out of the bank machine. $1.50 for your bank and $1.50 for the other, right? I think that $.75 for each bank would be a little more reasonable.

I agree that it was a good thing for Layton to bring up. The only thing that will get fees dropped is consumer outrage. By opening the topic up for debate, he's raising awareness of the issue.

Originally posted by Duzey
$3 is high to take $20 out of the bank machine. $1.50 for your bank and $1.50 for the other, right? I think that $.75 for each bank would be a little more reasonable.

I had always thought .50 was an appropriate charge for the transaction. It is nothing overly substantial for the consumer, but more than enough to turn a hefty profit for the business.

.50 sounds even better.

The sad thing is I am so appallingly lazy that I end up paying the $3 so I quite literally don't have to cross the street. :shk: