BofA holds off on ATM fee hike in Chicago

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Bank of America Corp. is expected to cut thousands of jobs in Chicago if it succeeds in buying LaSalle Bank. But, at least for now, let it be said that the Charlotte-based institution doesn't want to become a bad guy in the eyes of non-customers in Chicago who want to use the bank's ATMs.

The nation's second-biggest bank recently boosted surcharges for non-customers withdrawing cash at most of its ATMs nationwide, to $3 from $2.

But cash machines in the Chicago area -- where Bank of America is in the process of acquiring the city's No. 2 bank -- will escape the $1 hike for now.

"Chicago is an emerging market for us; we've got a smaller presence in the market," Bank of America spokeswoman Betty Riess explained. "We assess each market individually."

Bank of America isn't the only institution to charge different ATM surcharges depending on the market. Chase, for example, charges non-customers $2 in 13 states, but only $1.50 in four other states.

In Chicago, where Chase is the market-share leader, it charges $2, a spokesman said.

Late last month, U.S. Bancorp boosted its surcharge to $3 on about 300 ATMs in California, though it has not increased the fee in other markets. The increase was in response to Bank of America's hike, a U.S. Bancorp spokeswoman told trade publication American Banker on Thursday.

Also in August, Wachovia Corp. increased its surcharge to $3 at 200 East Coast ATMs. A spokeswoman for the Charlotte-based company told American Banker on Thursday that Bank of America's fee increase was "certainly a factor" in Wachovia's move.

According to the fall 2006 checking-account pricing study of Bankrate.com, a financial rate information research firm, the average ATM surcharge is $1.64, an all-time high.

As to why Bank of America is holding back in Chicago, Riess declined to say whether the company was worried about gouging consumers in a market where it's a second-tier player, with market share of only 1.1 percent, and where it's also in the process of doing a deal that'll catapult it overnight to No. 2 in the market.

Bank of America has double-digit market share in at least a dozen other U.S. cities, from 27 percent in Seattle to 14 percent in Houston. In New York and Philadelphia, its market share is 9 percent and 4 percent, respectively.

The purchase of LaSalle, expected to close in the fourth quarter, will give Bank of America market share of about 10.4 percent in the Chicago area.

Bank of America's new $3 surcharge applies primarily to non-customer ATM usage at its branches, Riess said.

The bank's surcharge for non-customers remains $2 at most ATMs that are off-site and stand-alone, she said.

And in Chicago -- for now anyway.

MERGER CONCERNS: The Woodstock Institute, the Metropolitan Alliance of Congregations and Citizen Action Illinois are among the groups that will sponsor a hearing this weekend on Bank of America's planned purchase of LaSalle. The groups have expressed frustration that banking regulators haven't held a public hearing on the impact that the deal will have on Chicago.

The community meeting will be 1 p.m. Saturday at First United Methodist Church at the Chicago Temple at 77 W. Washington St.

Also expected to attend are U.S. Rep. Luis Gutierrez and State Treasurer Alexi Giannoulias.

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byerak@tribune.com

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