Union Bank Decision a Blow to ATM Group

Union Bank of California’s decision last week to quit an alliance of financial institutions that did not charge extra ATM fees dashes hope for real competition among banks on the fees, consumer advocates say.

Only Sanwa, Bay View Federal, Sumitomo--and scores of credit unions--are sticking with the policy for now.

The alliance of banks and credit unions, formed early last year, had vowed not to heap additional fees on ATM users who were not their customers, although the customer’s own bank still levied an out-of-network fee.

Union Bank, the largest member of the alliance, ended its no-surcharge policy Aug. 30 and began assessing an additional $1.50 on all ATM users who do not hold accounts with the bank.

“By now many of our early partners have left the alliance,” said bank spokeswoman Sharon Woodson-Bryant on Thursday. “The unmistakable industry trend is toward surcharging.”

Union Bank’s $1.50 surcharge matches that of most banks and ATM networks.

The charge is assessed on top of a fee levied by the user’s own bank for visiting the ATM of a competitor.