Banks to File Suit to Block ATM Fee Limits

Banks operating in California are expected to go to court today to prevent cities from passing laws that restrict how much banks can charge non-customers for using their automated teller machines. The legal showdown--which follows similar battles raging in Connecticut and Iowa--was spurred by a newly approved city ordinance in Santa Monica that would regulate ATM fees charged by banks within the city limits. The law is expected to take effect next week. A similar ballot measure faced voters in San Francisco on Tuesday and was expected to pass. In response, the California Bankers Assn. said it would file suit today in federal courts in Los Angeles and San Francisco, seeking a preliminary injunction to keep the laws from taking effect. The industry says federal banking law prohibits local governments, such as cities and states, from regulating ATM fees of national banks. Consumer groups call the ATM surcharges excessive. Bank industry representatives said they hoped the lawsuit would discourage other cities from passing similar laws until the issue is resolved. Both Los Angeles and San Diego are considering ATM ordinances in the aftermath of the Santa Monica law.