ATM FEES THREATEN SMALL BANKS, FOES SAY.

Byline: Rob Wells Associated Press 

Opponents of new bank ATM fees launched a new attack Thursday, arguing the fees could cause consumers to leave small community banks - and drive small bankers out of business.

Paul Green, a Boston-area banker representing the Community Bank League of New England, said he fears customers will flee to large banks with many cash machines to avoid the new surcharges.

``This is not about reimbursement fees for the ATMs. It's about absorbing new market share and penalizing the customer for being with another bank,'' said Green, president of the Massachusetts Cooperative Bank of Dorchester. ``We are very concerned about our survivability.''

Green testified at a Senate Banking Committee hearing on a bill sponsored by the panel's chairman, Sen. Alfonse D'Amato, R-N.Y. The bill would prevent banks from charging customers twice for using a cash machine that is not owned by the consumer's bank.

A similar bill sponsored by Rep. Bernie Sanders, I-Vt., is pending in the House, but neither proposal has been scheduled for a committee vote.

In April, major ATM networks agreed to permit banks to charge these additional fees, known as an ATM surcharge, to recoup their investment in the machines and their operation. The surcharge, typically $1, is in addition to an interchange fee, which ATM networks charge banks for using their computer lines.

D'Amato, whose bill would prohibit the surcharge, but not the interchange fee, strongly condemned banks for the new fees, aligning himself with some of the committee's most liberal Democrats, such as Sen. Barbara Boxer, D-Calif.