When Washington Mutual Inc. promoted free use of its automated teller machines for everyone, without the usual $1.50 surcharge, it used the slogan: “The Buck-Fifty Stops Here.”
The Buck-Fifty is back.
In a policy change, the largest U.S. savings and loan on Wednesday said that beginning Nov. 17 it will charge people who use its ATMs and do not have accounts with the bank.
Seattle-based Washington Mutual will institute a $1.50 ATM surcharge in most states, and charge $2 in Florida, Georgia, Illinois, Nevada and Oregon. It had never previously charged fees in Washington state and Oregon.
The bank started its no-fee policy in many branches five years ago, when it was expanding aggressively, and in 2003 rolled it out into such markets as New York and Chicago.
“They made a big splash by repealing those charges, with the rationale that they would attract more new customers,” said Greg McBride, senior financial analyst at Bankrate.com. “To reinstate the surcharges suggests the program may not have been as successful as hoped. It may have also inconvenienced their own customers.”
Washington Mutual spokeswoman Libby Hutchinson said ”customers have had long waits in line” at some ATMs. The bank’s ATMs got about 2 1/2 times more use than a typical ATM, she said.
Hutchinson expects the new fees to generate a “modest” increase in revenue. She said the bank will use the fees to upgrade its network, including the addition of Russian and Chinese language capabilities at all ATMs. Washington Mutual is now focused on “organic growth,” she said.
Like most rivals, Washington Mutual does not break out ATM fee revenue. In the third quarter, depositor and other retail banking fees totaled $578 million, about 18 percent of the bank’s $3.29 billion of lending and fee income combined.
Washington Mutual recently had 3,551 ATMs, as well as 2,051 branches and $333.6 billion of assets.
Bankrate.com estimates that U.S. consumers pay nearly $4 billion a year in ATM fees, with an average $1.40 surcharge.
It said 91 percent of banks charge non-customers to use their ATMs. The exceptions are mainly smaller, community banks that do not have large costs to maintain ATM networks, or want to prevent business from migrating to larger competitors.
Washington Mutual’s Hutchison added that “people are increasingly going to grocery stores and other places where they can get cash for free. “This means having surcharge-free ATMs may not be the competitive advantage it was in the past.”