CONSUMER GROUP FINDS ATM FEES FLOURISHING.

Byline: Bloomberg News

The rush by U.S. banks to charge consumers new fees for the use of automated teller machines is adding fuel to congressional efforts to ban the fees, a consumer rights group reported.

Typically, bank customers pay a fee to their bank when they use an ATM machine owned by another institution. A year ago this month, the two largest ATM networks, Cirrus and Plus, granted banks that owned ATMs the right to charge a second fee to individuals who use their machines but don't have accounts with their banks. NationsBank Corp., Fleet Financial Group and First Union Corp. are among the U.S. banks that now levy the surcharge.

During the past six months, the percentage of ATM machines that charge the new fees has almost doubled to 45 percent from 23 percent, according to the U.S. Public Interest Research Group, which lobbies the federal government on behalf of consumers. ``Banks aren't earning money the old-fashioned way; instead they are ripping off the consumer,'' said Ed Mierzwinski, the consumer program director at U.S. PIRG.

U.S. lawmakers are likely to use the study to bolster their legislative efforts to ban the surcharges. Republican Senate Banking Committee Chairman Alfonse D'Amato, who is embroiled in a tough battle for re-election, has blasted the new fees. He has said banks are imposing new, and unfair, financial burdens on consumers.

Bank representatives say institutions have to charge the new fees to finance the growing number of ATM machines.

U.S. PIRG said the largest U.S. banks are the most aggressive in charging the new fees. For example, 52 percent of cash machines owned by the nation's 100 biggest banks charge the new fees, while only 39 percent of the smaller banks impose the surcharge, according to the report.

The ATM system also represents a valuable new pool of revenue for banks, according to U.S. PIRG. Banks could earn an additional $1.9 billion in annual revenue from the new fees, the consumer group said.

The average ATM surcharge was $1.15 in 1997, although the fees ranged from 25 cents to $2.50, according to U.S. PIRG. The study covered 860 ATMs in 27 states and the District of Columbia.