Town Told To Comply With ATM Ruling

Friday, August 18th 2000, 12:00 am
By: News On 6

SAN FRANCISCO (AP) — A federal judge demanded Thursday that Santa Monica, Calif., leaders comply with his June order that suspended the city's ordinance prohibiting banks from charging fees at automated teller machines.

Bank of America and Wells Fargo have not opened their ATMs to outside customers despite U.S. District Court Judge Vaughn Walker's order nullifying Santa Monica's ordinance banning the fees. Instead of dropping the surcharges, those banks prohibited customers who do not bank with them from using their machines.

The council adopted an ordinance last year outlawing the fees, which range as high as $2.50 a transaction. The banks do not charge such fees to their own customers.

The legal tussle erupted after Santa Monica passed a resolution suspending the ordinance last month. But the banks, citing various legal precedents, said the council had to pass an ordinance, not a resolution, for the fee ban to become legally abolished. Without such passage, the banks could become subject to private, class-action suits that could cost them millions, the banks' attorneys said.

Walker gave the council until Nov. 2 to pass an ordinance instead of a resolution, and held off on a possible contempt-of-court order pending the council's action.

Santa Monica's attorney Marsha Jones Moutrie said she would pass along Walker's wishes to the council, but said she did not have the authority to order the council to take any action.

The 9th U.S. Circuit Court of Appeals has agreed to review Walker's order that suspended the ordinance in a case widely watched by the banking industry. Walker said the National Banking Act allows the federal government, not states and local governments, to mandate banking laws.

San Francisco voters approved a similar ordinance in November. But it never took effect and was not involved in Thursday's decision.