Attorney General Lockyer Files "Friend of the Court" Brief Protecting Right of States to Regulate Bank ATM Fees

Tuesday, February 1, 2000
Contact: (916) 210-6000,

(SACRAMENTO) – Attorney General Bill Lockyer today filed a "friend of the court" brief asking a federal court of appeals to uphold the ability of California to protect consumers by regulating bank Automated Teller Machine (ATM) fees.

"California has a vital interest in ensuring that states can protect consumers when it comes to banking actions," Lockyer said. "In enacting federal banking laws, Congress has allowed states to have a role in protecting consumers, which cannot and should not be taken away by bureaucrats at the Office of the Comptroller of the Currency."

In the brief submitted to the Ninth Circuit Court of Appeals in San Francisco, the Attorney General argues that the local ordinances are not preempted by federal law and extend important consumer protections that are within state police powers.

"The Santa Monica and San Francisco ordinances were adopted to protect consumers from surcharges that amount to a double charge against non-account holders who withdraw money from ATMs. Therefore, by its express terms, the EFTA (Electronic Fund Transfers Act) authorizes and does not preempt the Santa Monica and San Francisco ordinances," the Attorney General's brief states.

Disagreeing with the Office of the Comptroller of the Currency, the Attorney General's brief contends the California ATM fee restrictions do not impose an undue burden on the performance of banks' and are not precluded by the National Banking Act. The brief adds that the surcharges banned by the local ordinances are not a fundamental function of the banking operation, and were in fact restricted voluntarily by the bank until being lifted in 1996.

Lockyer was joined in the "friend of the court" brief by attorneys general in Connecticut, Iowa, Minnesota, New York, Oregon, West Virginia, the Commonwealth of the Northern Mariana Islands and Virgin Islands.

"Whether bank ATM fees should be limited is a policy issue to be decided by local and state policymakers," Lockyer said. "In this case, we want to protect the ability of California to look after consumers by regulating banking activities."

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