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Senate Proceeding on May 5th, 2010 :: 7:14:10 to 7:24:45
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Tom Harkin

7:13:54 to 7:14:16( Edit History Discussion )

Tom Harkin: for the duration of today's proceedings. the presiding officer: without objection. mr. harkin: i come to speak about an amendment i have filed, along with senators schumer and sa the purpose of the amendment is very simple -- to protect consumers from being charged unreasonable fees by machines. how often have you gone to an a.t.m. machine to access your own cash from your own credit

Tom Harkin

7:14:10 to 7:24:45( Edit History Discussion )
Speech By: Tom Harkin

Tom Harkin

7:14:17 to 7:14:38( Edit History Discussion )

Tom Harkin: union or your own bank and they charge you a couple bucks? $2.50, $2.25, $3, $4, we have seen as high as $5 in parts of the country. well, mr. president, i want to talk a little about that, how unfair it is. in recent years, congress has acted to protect consumers by setting appropriate limits the types of fees that financial

Tom Harkin

7:14:39 to 7:15:00( Edit History Discussion )

Tom Harkin: institutions can charge consumers in areas like credit cards a spurred by a good proposal by chairman dodd, the federal reserve is now considering rules regarding overdraft fees. one area that remains unregulated is the fees that consumer pay to use a.t.m.'s. by now, mr. president, there is no limit on the fee that an

Tom Harkin

7:15:01 to 7:15:22( Edit History Discussion )

Tom Harkin: operator of an a.t.m. can charge a coumer for using that machine. currently, the only regulation in this area -- clearly infficient, i might add -- is that the operator must disclose how much they will charge so that when you access an a.t.m. and you want access and get a thing, it has to tell you how much they are charging you, and can you refuse to do that if you want.

Tom Harkin

7:15:23 to 7:15:44( Edit History Discussion )

Tom Harkin: but this nominal disclosure requirement does nothing to ensure that the charges are not arbitrary ways for banks and third party owners of these machines to make an unreasonable sum on the backs of csumers. some of my colleagues may remember that until 1996, most processing networks actually prohibited -- prohibited -- the

Tom Harkin

7:15:45 to 7:16:06( Edit History Discussion )

Tom Harkin: operators of a.t.m.'s from adding an additional surcharge for the use of the a.t.m instead, to cover the cost of the transactions, banks paid fees that passed between the consumers' banks, the a.t.m. operating bank and the card network. that fee of about 50 cents still

Tom Harkin

7:16:07 to 7:16:27( Edit History Discussion )

Tom Harkin: changes hands today to cover the cost of processing. now, simply put, by charging consumers these fees while collecting fees from other banks banks, these big banks are double dipping on the backs of consumers. my amendment would end that

Tom Harkin

7:16:28 to 7:16:51( Edit History Discussion )

Tom Harkin: double diptio dipping. enticed by the prospect of easy money, in 1996, the rules that prevented banks from charging consumers were overturned by the big card networks, visa, mast spur cards, and the big banks. for this reason, in 1997, i was a cosponsor, along with chairman dodd and others, of a measure

Tom Harkin

7:16:52 to 7:17:12( Edit History Discussion )

Tom Harkin: sprowsed bintroduced by then-banking committee chairman d'amato that would have restored these rules and charged nothing for a.t.m.'s, nothing. unfortunately, we were unsuccessful in that effort, but it was bipartisan. chairman d'amato was a republican. now, as a result, because we

Tom Harkin

7:17:13 to 7:17:33( Edit History Discussion )

Tom Harkin: were unsuccessful in 1997, the amendmenamount of fees that consumers pay has skyrocketed. now, according testimates by the federal reserve, the average surcharge fee paid by consumers for accessing their own money is $2.66. as i said, in some places, in airports and other places, it's

Tom Harkin

7:17:34 to 7:17:55( Edit History Discussion )

Tom Harkin: as much as $5. that's to access your own money. that doesn't seem right to me and it doesn't seem right to a lot of consumers. it's unfair for people to pay that much to access their own cash. if a.t.m. operators want to charge a fee toover the cost, to cover the cost of providing a

Tom Harkin

7:17:56 to 7:18:17( Edit History Discussion )

Tom Harkin: service, i can understand that. but that fee needs to relate to what it actually costs to process the transaction, not just the maximum that they think they can get away with. to ensure that these fees are reasonable and relate to the costs of processing the transaction, my amendment would require the new consumer financial protection bureau to

Tom Harkin

7:18:18 to 7:18:38( Edit History Discussion )

Tom Harkin: ensure that fees charged to consumers at a.t.m.'s bear a reasonable relation to the costs of processing the transaction. the best data available suggests that the costs of processing a transaction today -- are you ready for this? -- 36 think about that the next time you go to the a.t.m. and you got to get some cash out and it

Tom Harkin

7:18:39 to 7:19:01( Edit History Discussion )

Tom Harkin: comes up and says we're charging you $2.50. the real cost of that? about 36 cents. where does the rest of the money go? the rest of the money goes to the big banks and the big card networks, and they're making a fortune off of this. now, we got that data from a

Tom Harkin

7:19:02 to 7:19:23( Edit History Discussion )

Tom Harkin: survey conducted by the office thrift supervision, which suggested in 1997, at the time we had our amendment, that the costcost of processing a transaction was only 27 cents. 27 cts. so what we did is we factored in inflation. that would bring the dos about the cost to about 36 cents today. now, that consume improvements in technology has

Tom Harkin

7:19:24 to 7:19:44( Edit History Discussion )

Tom Harkin: not brought down costs, which obviously they have. we have new technologies, faster speed networks, probably has brought the cost down. so when i say that the cost of you going to an a.t.m. machine to access your money is 36 nts, that's on the high side. that's on the high so what our amendment basically says is that they could -- they

Tom Harkin

7:19:45 to 7:20:07( Edit History Discussion )

Tom Harkin: could set up a rsonable charge based upon what the costs are. but we put an upper limit. we say no more than 50 cents per transaction. so our amendment would basically say that any time you go to your a.t.m. machine, they have to charge you a reasonable fee based upon what would be set but no case more than 50 cents.

Tom Harkin

7:20:08 to 7:20:28( Edit History Discussion )

Tom Harkin: no case more than 50 cents. well, again, i just point out, mr. president, until 2002, in my state of iowa, the law required that any a.t.m. had to make that available at no cost, no fee to all users. so iowans were not charged any

Tom Harkin

7:20:29 to 7:20:49( Edit History Discussion )

Tom Harkin: fees at all and the iowa banks did fine under this arrangement. iowa consumers were protected from unfair fees. but in 2002 this reasonable iowa law was preempted by federal banking regulators. federal banking regulators preempted now, again, as i have pointed out, in the absence of these

Tom Harkin

7:20:50 to 7:21:11( Edit History Discussion )

Tom Harkin: state laws, the federal banking regulators have taken no action to limit the amount of fees that consumers can be charged. according to the new rules projt, national banks, these big banks, collected almost $5 million in a.t.m. fees from iowa consurs in revenue in the first six months. the iowa credit

Tom Harkin

7:21:12 to 7:21:32( Edit History Discussion )

Tom Harkin: it was about $10 million just in the first year. well, you add that up, that can come to a lot of money. well, anyway, i -- i bring this example of how things were in iowa before 2002 because it's a kind of a balance that the bill

Tom Harkin

7:21:33 to 7:21:55( Edit History Discussion )

Tom Harkin: that is pending before us should restore. quite frankly, things have tipped so far in favor of big banks in this country and so far away from consumers, we often don't even know what a reasonable balance looks like anymore. but the example of iowa from several years ago in which consumers were protected from unfair a.t.m. fees while banks

Tom Harkin

7:21:56 to 7:22:16( Edit History Discussion )

Tom Harkin: still profited is an example, i think an excellent example, of the balance that we need to return to. so this broader bill that senator dodd has forward, senator shelby brought forward isn't antibusiness, it's not antibank but it does seek to return us to a situation in which the needs of consumers and the rights of businessesre considered alongsidene

Tom Harkin

7:22:17 to 7:22:38( Edit History Discussion )

Tom Harkin: another. restore some balance for consumers in our society. and so when i looked at this bill, i thought, well, there is one area that kind of seems to get overlooked. i suppose a lot of people say, well, two bucks, well, you know, here's the other

Tom Harkin

7:22:39 to 7:23:02( Edit History Discussion )

Tom Harkin: unfair thing about it. the average person going to an a.t.m. machine probably takes out 20 bucks, 50 bucks to get them through a day or a couple three or four days in the week and they're charged $2.50 for accessing that 20 bucks or 50 bucks. someone else goes in there and

Tom Harkin

7:23:03 to 7:23:24( Edit History Discussion )

Tom Harkin: wants to get $500, they're charged the same $2.50. so the purd fall burden falls more heavily on moderate-income people who need to use the a.t.m. to get some grossly unfair. so it's unfair that the banks and the a.t.m. operators can charge whatever they want to charge.

Tom Harkin

7:23:25 to 7:23:46( Edit History Discussion )

Tom Harkin: when i pointed out that according to the office of thrift supervision, the data they collected, the average cost of -- of this transaction, of processing an a.t.m. is only 36 cents. why are you being charged $2.50 or $3 or as much as $5? well, that's wha this amendment

Tom Harkin

7:23:47 to 7:24:08( Edit History Discussion )

Tom Harkin: seeks to stop. again, to get this balance back where it should be. my amendment is also supported by the u.s. public interest research group, the consumer federation of america, consumer action, consumers' union and the national consumeraw center on behalf of its low-income clients. so i just want to close by

Tom Harkin

7:24:09 to 7:24:29( Edit History Discussion )

Tom Harkin: thanking my colleague, senator dodd, for his tireless w move this critical bill forward and to help try to again try to establish that bance in our country between our consumers, our depositors, our c banks, the big banks, try to get a balance back. and as i said, we've gotten so far off track we hardly

Tom Harkin

7:24:30 to 7:24:46( Edit History Discussion )

Tom Harkin: recognize what a balance is any longer. i think this bill goes -- does a great thing in trying to restore that balance. i just want to make sure that consumers are no longer taken advantage of by these unfair a.t.m. fees that are out there,

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