Sen. Chuck Schumer is calling for a federal probe into rising ATM fees in light of a report showing New Yorkers pay the second highest rates of any city in the nation.
The study last week, by Bankrate.com. shows New Yorkers pay an average of $5.03 per transaction when withdrawing cash from outside their banks with fees soaring as high as $8.
The Consumer Financial Protection Bureau needs to conduct a federal investigation and crack down on “exploitative ATM practices” Schumer told amNewYork.
“The [bureau] has the power to do this on its own so that’s the quickest and easiest way,” Schumer said. “They’re in charge of protecting the consumers.”
Schumer called for the probe during news conference Monday at his Manhattan office.
When consumers make withdrawals through out-of-network ATMs or banks, they usually get hit with a transactional fee. Withdrawal fees climbed 4% nationally this year to a record high of $4.52 (compared to $1.97 in 2008), according to the report. (Bankrate.com surveyed 10 of the largest institutional banks in 25 top U.S. markets.)
ATM withdrawals fees have risen in part because of a decline in total out-of-network withdrawals, said Greg McBride, the chief financial analyst at Bankrate.com. “As people get smarter about their ATM usage there are fewer and fewer people making out of network transactions,” McBride said. “And the cost of maintaining those networks which has traditionally been born by out-of-network transactions has now spread over fewer people.”
Last year banks collected $34 billion in transactional fees, including ATM withdrawal fees, according to the Federal Deposit Insurance Corporation.
Schumer wants the Consumer Financial Protection Bureau to implement rules that would limit the fees imposed by ATMs and require the machines to disclose their fees. Many banks and ATMs currently hide the charges of an out-of-network withdrawal, according to Schumer. “If you have a Chase card and it’s a Chase machine they will tell you how much it costs but if it’s out of network — it’s not a Chase machine- they don’t tell you the cost.” Schumer said, adding. “And the little ones in the bodegas don’t tell you the cost at all.”