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BofA raises ATM charge to $3 from $2

September 14, 2007|From the Associated Press

Bank of America Corp. has raised the fee it charges non-customers to withdraw cash from most of its automated teller machines to $3 from $2, a move that may prompt rivals to follow.

The largest U.S. retail bank said it began charging the higher fee July 31 and within a month was assessing it at about 10,700 U.S. ATMs in its network of 17,183, by far the nation's largest.

Bank of America, based in Charlotte, N.C., made the changes at branches and in larger offices in such places as grocery stores. It said the fee remained $2 at 6,300 "off-site" locations such as malls, airports and universities, where it says non-customer traffic is higher.

"Banks have had earnings squeezed because short-term interest rates rose relative to long-term rates, and they look to fees to offset that," said Bert Ely, an independent banking consultant in Alexandria, Va.

"If it seems to stick and be a net plus for Bank of America, others will follow."

Bank of America is the second-largest U.S. bank by assets. Rivals including Citigroup Inc., JPMorgan Chase & Co., Wachovia Corp. and Wells Fargo & Co. said they didn't plan broad-based ATM fee hikes. But they do evaluate the cost of ATM services -- as well as their rivals' practices.

The average ATM charge for non-customers was $1.64 in 2006, nearly double the fee in 1998, according to Bankrate.com.

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