DES MOINES, Iowa – The Iowa Credit Union League says that Iowans have lost an estimated $10 million after a Federal Court ruled in March 2002 that Iowa's Electronic Funds Transfer law could not apply to federally chartered national banks. The Electronic Funds Transfer Act had been interpreted to disallow ATM surcharges. Iowa was the last state in the nation to have a law against ATM surcharging. The League reported that the state has a good source of data on the surcharges since one routing processor, called SHAZAM, serves as the central routing unit for all Iowa ATM transactions. According to SHAZAM, the total dollar volume of all Iowa ATM surcharges in the first six months of 2003 was over $4.8 million, arising from over 3.2 million transactions. Annualized the total surcharge revenue to the banks would reach $10 million, the League report said. The League said that bank surcharges in Iowa are higher than the national average as found in surveys from the Federal Reserve ($1.48 vs. $1.36). "Banks call ATM fees `convenience fees,' and now we understand why," noted Patrick Jury, Vice President of the Iowa Credit Union League. "After suing to surcharge at the ATMs, banks have conveniently taken $10 million from Iowans and recently added another $500,000 by refusing to pay taxes on that profit." The League report found that the number of ATMs overall increased in Iowa after the anti-surcharge law was overturned, moving from 2,500 ATMs in March of 2002 to 3,900 now. Of those 3,900, the League reported that 312 belong to credit unions and, of those, 263 are part of a surcharge-free program hosted by SHAZAM. Overall, 1,200 ATMs across the state are part of the surcharge-free program. The Iowa report also discussed the measures the League had taken to educate consumers about the strategies they could use to avoid the surcharges, such as using debit cards instead of cash and getting cash back from transactions in stores. The SHAZAM data indicated that consumers took the measure to heart. ATM transactions across the state declined since the surcharges were allowed, from roughly 4 million in March 2002 to just over 3.4 million in February 2003. Transactions at stores, so-called point of sale transactions, have increased, passing ATM transactions last May. "Iowans have modified their behavior by finding prudent ways to avoid unnecessary surcharges," Jury said. "Without this behavior change, who knows how many more millions of dollars banks would have made off of Iowans," Jury said. The League also noted that banks had successfully lobbied Iowa's legislature to exempt ATM surcharges from sales taxes. [email protected]