The Colorado Senate voted Monday to ban ATM fees in the state, although the prohibition may prove more a political maneuver than a windfall for consumers.
The ATM-fee measure was amended onto Senate Bill 188, which bars merchants from adding extra fees on debit-card transactions, extending an existing ban on credit-card surcharges.
“It is hypocritical to say to a bank, ‘You can do it,’ and prevent small-business people from doing it,” said state Sen. Keith King, R-Colorado Springs, who crafted the amendment to try to bring down the original bill.
“It is the big corporations against the little guys trying to make a business work,” said King, who was a merchant for 25 years.
The original bill, initiated by Visa and supported by banks and credit unions, reflects the growing importance of debit cards, which have become more popular than credit cards.
Sen. Josh Penry, R-Grand Junction, who sponsored the bill, argues the measure is a necessary update that protects consumers from hidden surprises, regardless of how they pay for a transaction.
Merchants, engaged in a heated battle with credit-card companies on the interchange fees they pay, are opposed. For one, merchants aren’t adding surcharges, they say. They also want greater freedom to make consumers aware of the hidden costs to their payment methods, something the credit-card companies prevent them from doing.
The amendment put the bill’s backers, who promoted it as a consumer-protection measure, in an awkward spot.
What could be more consumer-friendly than getting rid of ATM fees? The amendment passed with bipartisan support.
“If that logic holds out, that should be applicable to ATM withdrawal. These are the same cards,” said Jason Hopfer, a lobbyist for JLH Public Affairs, which represents Circle K convenience stores. Hopfer opposed the original bill but supports the amendment.
Banks and credit unions in the state, which initially supported the measure, will now oppose it unless the amendment is stripped out.
“We are strongly opposed to this amendment to the degree that we would not want to see the bill move forward,” said Don Childears, president and chief executive of the Colorado Bankers Association.
King said the public will soon find out how “consumer friendly” the Senate is when the bill comes up for its third reading in coming days. The bill still must pass the House.
