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Current Events - 07/07/2000

CBA Proves Its Effectiveness in Court — CBA, Bank of America, and Wells Fargo Bank have won a resounding victory for the industry before Judge Vaughn Walker in our ATM access fee litigation.  If you haven't been following this story with us you must have been out of the country or just back from Survivor Island.  CBA and the two banks have been successful in our  attempts to have the Federal District Court declare unconstitutional the ordinances in San Francisco and Santa Monica, which would have banned access fees for use of a bank's ATMs by  non-account holders.  On Friday, June 30, Judge Vaughn Walker of the Federal District Court in San Francisco entered an order granting CBA (on behalf of all its members), Bank of America, and Wells Fargo a summary judgment in our lawsuit.  All questions concerning the merits of our case have been answered as a matter of law and we have won.  The trial stage of this litigation is now over.   The Court's Order has given us all the relief we asked for in our lawsuit: it permanently enjoins San Francisco from ever placing Proposition F into effect and it permanently enjoins Santa Monica from enforcing its ordinance.  The order also directs Santa Monica to suspend its ordinance so that no individual plaintiff can use it as a basis to file suit against commercial banks.  A letter has been sent to Santa Monica urging the city to pay heed to Judge Walker's order (which is effective immediately).  We have not yet heard back from the Santa Monica city attorney as to the city's intentions.

Undoubtedly, San Francisco and Santa Monica will appeal this definitive and final ruling from the judge up to the Ninth Circuit.  The last time we were in front of that Court, the Ninth Circuit summarily affirmed our preliminary injunction.  To date, there is no conflict among the Federal Circuit courts on this issue of law and we are confident the Ninth Circuit will rule in our favor as well.  We are in the process now of preparing a Proposed Final Judgment in the case as required by Judge Walker's Order.  It is this Judgment which will ultimately be appealed by the cities.  I also anticipate that the cities will ask for a stay, delaying the effectiveness of Judge Walker's Order.

I will keep you informed of all further activity in this case and will let you know when Santa Monica suspends its ordinance pursuant to Judge Walker's Order.  If you have ATMs in Santa Monica, consult with your counsel before making any changes in your policy concerning access fees for use of those machines by non-account holders.

The bottom line is that CBA has proven itself to be a successful advocate in federal court by defending the right of banks to charge for the convenience they provide in making their ATMs accessible to non-account holders.  In the free market society in which we live, one would have thought it axiomatic that banks would be permitted to charge for services they provide, especially when others who perform the very same services have never had their ability to charge put into question.  Moreover, any ATM access fee is disclosed to the customer before the transaction is completed and that customer has the right to terminate the transaction and incur no charges whatsoever.  Our victory today means that customers will continue to have the convenience of a large number of ATM locations throughout the state and they will continue to have the right to make the choice of whether to avail themselves of this convenience or not.  The industry has been forced into court to protect its rights and to protect this freedom of choice for all customers.  More news on this important case as it happens.