ATM fees won’t be removed

Friday, Aug. 1, 1997 | 11:02 a.m.

If you're a little short of cash on your way to the movie and have to stop at an ATM and pay a couple bucks to withdraw funds from your credit union account, don't expect Bank of America's chief executive officer to cry a river over the fee you paid.

It goes beyond the fact that BofA makes a profit on the transaction. It's a part of the philosophy banks are trying to maintain while some lawmakers are intent on legislating bank fees.

"We don't charge a customer anything to use our ATMs," said David Coulter, chairman and CEO of BankAmerica Corp., parent company of the largest financial institution serving Nevada.

Since BofA maintains the largest ATM network in Southern Nevada, Coulter sees plenty of situations for noncustomers to take advantage of the convenience of the machines. But he also feels noncustomers should pay for the privilege.

"I don't have a hell of a lot of sympathy for the guy who apparently expects to use the machine for free," said Coulter. "If you want to use it without paying a fee, become a customer."

Coulter, in Las Vegas on Thursday to consult with gaming industry clients and to address employees on one of his frequent visits to the area, said the banking industry gets concerned when legislators consider regulating fees.

"It's clear that banks have to do a better job of explaining our charges," said Coulter, who noted that like most banks, BofA offers free access to funds with an ATM card, but charges noncustomers $1.50 per transaction to access funds from another financial institution.

Coulter believes a similar analysis of fee and interest rate structures could explain why a research report released Thursday found that consumers pay nearly $30 a year more to maintain a checking account at a big bank than a smaller one.

The Washington, D.C.-based U.S. Public Interest Research Group said its survey of fees at 419 banks in 29 states and the District of Columbia found that it cost an average of $218.27 a year to maintain a checking account in a large bank and $190.33 in a small bank. At credit unions, the annual charge averaged $108. Among the states surveyed was BofA's home base of California.

Sponsors of the survey said the big banks' higher fees are a result of mergers in the banking industry that have led to less competition and price gouging.

Coulter said that while he hadn't seen the survey, he knows that bank accounts in general have become more sophisticated over the years, evolving from simple passbook and checking accounts to money market accounts that pay higher interest rates while meeting a customer's checking needs.

He acknowledged that smaller banks have turned up the heat on big banks with some competitive rates as well as selling themselves as closer and friendlier with customers. Big banks generally respond with volume in the marketplace -- more branches and personnel -- and more sophisticated technology.

While the PIRG survey points an accusatory finger at big banks for gouging customers with higher-than-necessary fees, there's no denying banking profits have been soaring. BofA stock has climbed to a Thursday close of $75.50, down 12 cents. But Coulter attributed the success of the stock more to good times in the economy as a whole. BofA stock has consistently outperformed analysts' expectations and Coulter said that's just a matter of the company's management clearly communicating its game plan to the stock watchers.

Other observations from Coulter:

* Bank of America's growth picture may focus on the Pacific Rim. Although the bank has had a presence overseas since the middle of the century, Coulter believes the company may move to expand in some of the economic hot spots Asia offers.

* BofA's ATM network will convert to digital technology from analog, which means the machines of the future will be able to do much more than they do today. Within two to three years, Coulter said ATMs will have the ability to make reservations and distribute postage stamps in addition to conducting bank business.

* The bank will continue to be a dominant player in the gaming industry. "We think we know the industry as well as anybody," the CEO said.