Connecticut Ban on ATM Fees Rejected

The Connecticut Supreme Court on Monday rejected state regulations barring banks from charging noncustomers for using their automated teller machines.

The court ruled 5 to 2 that the law on which the ban was based was not drafted with ATMs in mind. The decision turned on different issues than a recent case in federal court in California, where a judge has stopped enforcement of similar regulations in Santa Monica and San Francisco.

The fees, typically ranging from $1 to $2, are levied on customers who use ATMs belonging to another bank. The decision does not affect the fees a customer’s own bank may also charge for using another bank’s ATM. The legality of those fees was never in question.

Connecticut was one of only two states where the fees had been banned. Iowa’s ban remains in effect.

In banning the fees in 1998, Banking Commissioner John Burke relied on a 24-year-old law that prohibited banks from charging noncustomers any fees. But the Connecticut Supreme Court said that law did not envision ATMs or other changes in the industry.

Some consumer groups argue that bank mergers give customers of smaller banks little choice but to use ATMs of larger banks. But banks argue that they should not be forced to provide free services to noncustomers.