Appeals Court Rejects 2 Cities’ ATM Fees Ban

A federal appeals court rejected a bid by Santa Monica and San Francisco to reinstate a ban on fees charged to people who use automated teller machines at banks where they don’t hold an account.

The 9th Circuit Court of Appeals upheld a lower court ruling that the cities violated federal banking law in fall 1999 by trying to bar the ATM fees, typically $1.50 per transaction. In the fall of 1999, the cities became the first in the U.S. to try to ban such fees, calling them exorbitant and unfair to the elderly and disabled. But Bank of America Corp., Wells Fargo & Co. and the California Bankers Assn. sued, saying that the cities lack jurisdiction and that ATMs, designed as a benefit for customers, are costly to operate.

San Francisco plans to petition for a rehearing before the full 9th Circuit, and Santa Monica is considering its next move, spokesmen said.