SAN FRANCISCO -- California banks are suing in federal court to block a first-ever voter-approved ban on automatic teller machine surcharges, contending it is unconstitutional.
San Francisco voters passed the landmark measure by a margin of 66 percent to 34 percent on Tuesday. It outlaws the $1 to $2 fees charged by banks to those who withdraw money from their ATMs but maintain accounts elsewhere.A judge is scheduled to hear arguments Nov. 15, though the initiative is not scheduled to take effect until late this month.
"Other states have been pre-empted by federal law, and we think that will happen in San Francisco," said Robert Barnes, campaign manager for the banker-sponsored Coalition for ATM Choice.
But Jon Golinger, consumer director for the California Public Interest Research Group, said the ordinance will likely be upheld because the Electronic Funds Transfer Act allows localities to enact consumer protection measures on banking issues.
The ATM ban is similar to those in Connecticut, Iowa and cities including Santa Monica, though those were imposed by politicians. The bans in Connecticut and Santa Monica are being challenged in court.
The results didn't surprise Greg Wilhelm, the top lobbyist for the California Bankers Association, which is working to overturn the bans in California.
"You offer people a free lunch and how are they going to vote?" he said.