Holdout Sanwa Joins the ATM Fee Bandwagon

Sanwa Bank California said it will start charging nondepositors $1.50 for use of its automated teller machines next spring, the last large bank to abandon a promise not to impose such fees.

The decision by the unit of Japan’s Sanwa Bank Ltd. and the third-largest bank in California, will affect 108 ATMs throughout the state.

It comes after Union Bank of California, Glendale Federal Bank and California Federal Bank all dropped out of a “no surcharge alliance” with Sanwa and other banks. The banks created the alliance 18 months ago, promising not to charge ATM fees on nondepositors like those imposed by BankAmerica and Wells Fargo.

At one time, more than 100 California banks were in the alliance.

“Although we would have preferred to have all of the banks not surcharging, it is no longer feasible for us to be the only major bank in the state subsidizing ATM users,” a Sanwa Bank spokesman said.

In most states, bank customers who use another bank’s ATMs are usually charged a fee, often $1 or more, by that bank, in addition to a fee levied by their own bank for using a different ATM. Banks contend these fees recoup the cost of maintenance and services.

The double fees are being challenged. Last month, the Connecticut Banking Department ordered banks to quit charging $1 fees when nondepositors use their ATMs.

Earlier this month, the U.S. comptroller of the currency intervened, saying federal regulators should have authority to decide if national banks can levy such fees.