ATMs, Continued

Olaf read my post about the whole ATM-surcharge dealy and cruelly pointed out that I didn't actually, y'know, say whether I supported the NDP proposal. Nice of Olaf to give me the benefit of the doubt and not assume I'm a monkey on a string. (I will, however, perform a dance for bananas.) The short version is, yes, I do.

First things first. Either you think what's happening now is a problem or you don't. People are being forced, for a lack of options in their area, to use third-party ATMs that charge additional fees on top of their own banks charges. Like I said, either you think this is a problem or you don't. A reasonable argument could be made that nobody's putting a gun to people's heads and forcing them to use these things, but an equally reasonable argument is that people can't always plan ahead and when you need cash, you need it. I come down on the "yes, this is a problem", and more than that I believe this problem (unlike sundry others) is actually worth the Feds stepping in on.

The biggest reason is that this is a problem the feds created, in part. The wave of bank mergers during the 1990s allowed the consolidation of the industry and the shutting of now-redundant branches. Even in Toronto, the distance I had to travel between my "home branch" went from being 10 minutes to almost an hour (both by foot, for reference sake) because my branch got shut down during this period. This consolidation was a result of the mergers the Feds encouraged, not just allowed. When I was living in Ottawa, there was simply no convenient access to my own banks' ATMs on campus. By fourth year, the ATM I was using regularly near home had also been switched to a third-party ATM.

Now, my situation was hardly dire, but I was also living in the two biggest cities in Ontario. I can only imagine what the process has been like across the country. People are being forced to pay more than they had before because of a policy the Federal government actively pursued. It may seem minor, but once again anything that's an annoyance to me is probably a cause of serious anxiety for someone closer to poverty's edge.

In the comments thread below, I mentioned that Bell (a government protected-monopoly) is forced to allow the non-discriminatory use of its lines to third parties, without charging their customers extra fees. Given that banks these days are more networks than vaults (if you get my meaning) that may be a useful analogy. But there's one that I think is better: cable television.

In Canada, and across the US, it's common practice for governments to demand certain performance guarantees from cable television companies. For example, you might allow a company to build a new network, but only on condition that they build in the middle- and lower-class areas of a city, not just the richest. Does this raise the overall cost of the service? Marginally. But it makes sure that companies cannot abandon the low-profit parts of the market.

(I frequently use Communications Policy analogies because it's what I know best.)

Could a similar principle work with banks? I think it certainly could. ATMs, after all, are dramatically less expensive than operating in-person bank branches. Insisting that banks spend a small portion of their Crown-chartered profits to maintain decent service networks for the working class is hardly unreasonable, especially since they were all making plenty of money before the mergers that caused this whole problem.

Another possibility would be to make debit transactions zero-cost for the consumer and the business owner, thus eliminating the need for ATMs in large part. Either way, the government has some leeway for solving this problem.