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Washington Mutual Ends Policy of Free ATMs for Everyone

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Washington Mutual Ends Policy of Free ATMs for Everyone

Old 11-09-05, 02:20 PM
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Washington Mutual Ends Policy of Free ATMs for Everyone

http://www.latimes.com/business/la-f...?track=tothtml

November 9, 2005

Bank Ends Policy of Free ATMs for Everyone
By Kathy M. Kristof, Times Staff Writer

Washington Mutual Inc.'s free-for-all is about to become a free-for-some.

Seattle-based Washington Mutual has been one of the few big banks to give everyone no-cost access to its automated teller machines. But starting Nov. 17, people who don't have Washington Mutual accounts will pay fees to use its ATMs, the bank said Tuesday.

The so-called ATM surcharge will be $1.50 in California and most other states, said bank spokesman Gary Kishner. The fee will be $2 in five states, including Nevada and Florida.

The bank instituted the no-charge policy five years ago, when it was expanding into new territories and wanted to woo customers with the convenience of its ATM network, Kishner said. He said the ATMs got plenty of use about 2.5 times more than the average bank ATM but that didn't translate into more customers.

"People had access to our network, so they didn't feel the need to move" their accounts, Kishner said. "We had long lines at our ATMs, and very few of those people were our customers."

Washington Mutual customers will continue to have free access to the bank's 3,539 ATMs nationwide. "This in no way affects our customers the only difference they'll see is shorter lines at our ATMs," he said.

Consumer advocates said the bank's move was a disappointment but not a surprise.

"It's another example of banks using fees to bolster their bottom line," said Ken McEldowney, executive director of Consumer Action, a nonprofit organization in San Francisco. "It's too bad because they were one of the few places people could go and not be charged a fee."

Bankrate.com estimates that about 90% of financial institutions levy fees on noncustomers who use their ATMs. Bank of America Corp. and Wells Fargo & Co., Washington Mutual's biggest competitors in California, charge ATM fees of $1.50 to people who don't have accounts at their banks. The average ATM surcharge is $1.40, according to Bankrate.com.

"The ATM network is seen as a real selling point and another channel of interaction for existing customers," said Greg McBride, a financial analyst with Bankrate.com. "But you don't want to alienate your customers by charging a fee to use the network, so banks pass that cost on to noncustomers."

Even so, nearly all banks charge transaction fees to their own customers when they stray and use the automated teller of a competitor. Washington Mutual already charges its own customers $2 when they use another bank's ATM.

The new fee won't have a significant effect on Washington Mutual's earnings, said Jim Bradshaw, an analyst with D.A. Davidson & Co., a Montana-based investment firm.

Washington Mutual does not break out the amount it earns on ATM fees, but consumer banking fees as a whole for special services, bounced checks and the like generate about 15% to 20% of its income typical for most big banks, Bradshaw said. ATM fees are believed to account for just a small fraction of that income, he said.

"Most people will just stop using the ATM to not pay the charge," Bradshaw said. On the other hand, noncustomers who became hooked on the ATMs when they were free might finally bring their business to the bank.

Bradshaw noted that the bank used the free ATM access "as a form of advertising, hoping that they could morph [users] into customers with the convenience of their ATM network."

"They didn't have great success with that approach," he said. "But they may find that this forces folks to move."


Don't know if this affects anyone here, but I didn't even know that they did this. I always go to my banks ATM.

Chris
Old 11-09-05, 02:56 PM
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Well, as long as it is still free for members, I don't care what they do. Better than Chase Manhattan, that charges its members a fee (or used to when I was a member) whether you use their ATM or go inside to use a human teller.
Old 11-09-05, 03:07 PM
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I'm glad I'm a BoA guy. Their ATM's are on every corner around here.
Old 11-09-05, 03:11 PM
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I don't use a cash machine because every place takes credit cards, checks, or I actually have cash on me from regular banking.
Old 11-09-05, 03:12 PM
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I'm with kvrdave. I can't recall the last time I used an ATM.
Old 11-09-05, 03:27 PM
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Yeah, ATMs are so 90's.






Old 11-09-05, 03:32 PM
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There would be no need for ATMs if drug dealers and valets would get their shit together and get Verifone.
Old 11-09-05, 03:44 PM
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I used an ATM back in 2002. I think.
Old 11-09-05, 03:56 PM
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I stop at an ATM every few weeks to get out $60 or so to cover small purchases for a while. I'm with a small credit union without any convenient ATMs near me, but there's another credit union right by my work and though it warns that it may charge a $1 fee it never actually has.
Old 11-09-05, 04:02 PM
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All the credit unions around here have some sort of "gentleman's agreement" where they don't charge ATM fees to members of other credit unions.
Old 11-09-05, 04:23 PM
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That's why I bank with E-Trade. No ATM fees on their end, and they refund the ATM fees that are assessed when you use a non-ETrade ATM.
Old 11-09-05, 04:30 PM
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Originally Posted by FinkPish
Better than Chase Manhattan, that charges its members a fee (or used to when I was a member) whether you use their ATM or go inside to use a human teller.
I hate Chase and have been a member for over 10 years. I was never charged for using their ATMs. Base on the type of accounts you have, you might be limited to ATM service only, limited teller visit or no teller visit at all.
Old 11-09-05, 04:49 PM
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Originally Posted by Groucho
All the credit unions around here have some sort of "gentleman's agreement" where they don't charge ATM fees to members of other credit unions.
I thought we had the same arrangement here, but most times I've tried another credit union's ATMs I get charged a fee.
Old 11-09-05, 05:07 PM
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I usually only use ATMs to check my balance, since I never write it down.
Old 11-09-05, 05:14 PM
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I only read the article to see if they'd use the term "ATM machine".
Old 11-09-05, 05:48 PM
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I go to the ATM about once every 4-7 days to take out cash for small purchases.
Old 11-09-05, 07:01 PM
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Originally Posted by Bronkster
I only read the article to see if they'd use the term "ATM machine".
I guess you were sorely disapointed then. They even taunted you by calling them "automated teller machines" once.
Old 11-09-05, 10:04 PM
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Originally Posted by Groucho
All the credit unions around here have some sort of "gentleman's agreement" where they don't charge ATM fees to members of other credit unions.
Problem with this theory is that some credit unions then become "more equal" than other credit unions if they don't all pay their way.

Assuming an average population base where there are 3 credit unions and each credit union has about the same number of members.

Credit union A has 150 machines spread out over the city, credit union B has 75, and credit union C has 25.

If people know that they can use any of A, B, or C's facilities and not get charged, then what you'll find is that while credit union A has 33% of the members, their machines are being used by 75% of the population at large. Credit union C are only paying for 12% of the users and most of their members would just use either A or B.

The members of credit union A are effectively paying credit union C's members and not getting any benefit from it.

With a gentleman's agreement, the best thing for your credit union is to have less access points and hope that your competition will subsidise your members.

In theory, getting rid of the gentleman's agreement is better for all concerned (there is more encouragement for the larger credit unions to have a better network without worrying about other credit unions sponging off them).

If you're an AVERAGE user of the service, your transaction fee should be roughly equal to the return you get from the transaction fee by way of the higher interest rate; better bonuses, etc. (all profits should be returned to the members).

(Of course, that's the theory )
Old 11-10-05, 01:21 AM
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This stinks. I used WM ATM's all the time, but I guess now i'll actually have to head over to MY bank to do it. How inconvienent!
Old 11-10-05, 02:06 AM
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I'm surprised there are still banks out there that don't charge customers of their competitors.
Old 11-10-05, 08:09 AM
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PNC Bank's ATMs are free to use to everyone for the PNCs inside Wawas.
Old 11-10-05, 02:20 PM
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Am I the only one that just goes to buy a stick of gum at Target or a grocery store, pays with ATM, and takes out 40 bucks? No fee at all, and usually pretty convenient, even moreso if you're actually shopping.
Old 11-10-05, 02:42 PM
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[quote]Am I the only one that just goes to buy a stick of gum at Target or a grocery store, pays with ATM, and takes out 40 bucks? No fee at all, and usually pretty convenient, even moreso if you're actually shopping.[quote]

No I've been doing that for years works great.
Old 11-10-05, 04:02 PM
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Originally Posted by ChiTownAbs, Inc
I go to the ATM about once every 4-7 days to take out cash for small purchases.
btw, this better be good for their stock as SOMEONE convinced me to buy into a fund that invests heavily in WaMu.
Old 11-10-05, 04:20 PM
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Originally Posted by Groucho
All the credit unions around here have some sort of "gentleman's agreement" where they don't charge ATM fees to members of other credit unions.
Really? I didn't know that. Makes me glad I use one of our local credit unions...

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