Dwight Watt Internet Article #7

#7 ATMs (Automatic Teller machines) 9/11/1998

#7 ATMs (Automatic Teller machines)

Some of you may remember back in the late 1970's and early 1980s when ATMs first appeared. At that time ATMs worked only for one bank and the banks were promoting them as a way that you would no longer have to stand in line to see a human teller when you only wanted to withdraw your money, check an account balance, or transfer funds to a different account. The banks told us at that time the human cost were high and that the ATMs were going to save them money. Some banks such as Citibank announced they were going to start charging customers who went to a human teller to do these normal transactions instead of using an ATM.

Well now we have come a long way. Banks have shut down many of their branches, notice the number of empty bank branches next time you are driving in a larger city or even in a lot of smaller towns, and now are charging us to use an ATM. Not only that but they charge us twice in a lot of instances. If we use a different bank's ATM to get our money we get charged by Honor or what ever group handles the bank-to-bank communications, and this second bank charges us to use the machine. Would they rather we use a human teller?

However this is not always the case. Some banks, and particularly credit unions, do not charge for you to use their ATM. You still get an Honor (or other network organization) fee. Why is it the banks need to charge this $1 to $2 per use fee? The machines I suspect after 1-2 years cost substantially less than the bank hiring another teller, and are available 24 hours per day 7 days per week and not just 40 or less like a human. They are much more secure than a human is. Unless they are programmed wrong, they always count money right and check account balance. A gun held to them has no affect, and if they get shot, you either fix or replace them, whereas if a bank is robbed and a teller shot, there are all kinds of legal and medical expenses.

It appears to me that the banks would really rather us use the ATM. So why the charges. I am personally in favor of the government either through regulation or by law stopping the banks on these charges to use the machine. Now I understand that Honor has fee of $.75, but yet some banks and credit unions mange to absorb this cost also as convenience and a SERVICE to the customers. It appears to me that the banks have forgotten they are to be a service organization. There are plenty of ways for them to make their profit. Charging high enough rates on loans (and remember there had to be regulations put in place to keep them from robbing us on this), paying low enough rates on accounts, collecting sufficient funds from people who misuse the banking system by bouncing checks, late or no payments, etc.

Also, if you have noticed the banks are again coming out with another system for us to check balances, transfer funds etc. that they are encouraging the use of and that is the use of their telephone banking systems. Also with the rapid growth of direct deposit, I would assume that the number of human tellers need any more is substantially less. Not only that I am now noticing that some of the supermarkets are advertising each cash register is an ATM and for no fee you can take up to $100 cash with a grocery purchase.

I personally support the legislation that has been proposed in Washington to stop these fees. You will see ads in the coming weeks from the ABA and other bank organizations opposing it. However my final question to them is: Would you rather people use the human tellers, or use the ATMs or automated telephone systems?

Lastly I will tell you that I have accounts in several banks and credit unions and I do own stock in Eagle Bank in Statesboro GA. I also deeply appreciate the ATM system as it has meant the last two times I have moved I could leave my checking account in a small bank in Swainsboro and get it out in any ATM in the US. The ATM means a person who travels as much as me does not have to keep a lot of cash on myself.



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