Canadian Bankers Association

Canadian Bankers Association

January 25, 2007 11:41 ET

NDP Proposal on ABM Fees Nothing More Than Political Rhetoric

TORONTO, ONTARIO--(Marketwire - Jan. 25, 2007) -

Attention News/Business Editors:

The Canadian Bankers Association (CBA) is calling today's proposal by the leader of the New Democratic Party (NDP), Jack Layton, to eliminate automated banking machine (ABM) fees anti-consumer and anti-competitive. It shows a clear lack of understanding of how a competitive marketplace operates to the benefit of consumers and how these fees are charged.

This is just typical NDP bank bashing and political rhetoric being made without a full understanding of the facts," said Raymond J. Protti, President and Chief Executive Officer of the CBA.

Banks make significant investments in their own ABM networks to meet the needs of their customers. They allow non-customers to get cash from their machines but it is done as a convenience. And a fee is charged so that bank's customers are not subsidizing the use of those machines by customers of other banks.

"It's like saying to clients of a gym; we're going to let customers of other gyms in to use the weight room. We're not going to charge them, and you'll be subsidizing their use of it," said Mr. Protti.

It is important to remember that clients who use their own bank's machines, as they often do, do not pay a convenience fee at all.

Convenience fees are just that - a small fee charged to consumers who want to benefit from the convenience of using an ABM when and where they want to. It's the consumer's choice and every time they do a transaction at a machine not owned by their bank, they are given the option of paying the fee or cancelling the transaction. It is very transparent.

Banks also compete with private cash machine operators to put machines in locations where people may want cash, such as convenience stores, airports and casinos. Business owners may charge the ABM owner to rent the space and may receive part of the transaction fees charged by independent operators, which are typically higher than what a bank would charge. As a result, consumers pay more to use these machines.

"Mr. Layton talks about regulating these fees for banks but he is focusing on the lowest cost providers," said Mr. Protti. "Banks have 31 per cent of the machines in the market so the other 69 per cent, which are independent operators and have higher fees, would continue to be unregulated." "Mr. Layton also said that customers in the United Kingdom are not charged these fees," said Mr. Protti. "However, he should realize that services are not delivered for free: there is a cost to providing banking services. Looking at one service in isolation does not take into account that the costs to provide it are recouped through higher costs for other products in services."

"In Canada, we have a user pay system that is transparent and fair," he added. "And US bank customers pay 15 per cent more than Canadians do in convenience fees."

Canada's six largest banks spent $4.4 billion on technology in 2005 and more than $32 billion since 1996.

For consumers who think they are paying more in fees than they should, the CBA recommends that they talk to their financial institution about their banking patterns and get the service package that best suits their needs. Consumers can also compare packages and service offerings by Canadian financial institutions on the website of the Financial Consumer Agency of Canada at

The Canadian Bankers Association is an industry association representing 54 domestic chartered banks, foreign bank subsidiaries and foreign bank branches operating in Canada and their 249,000 employees.

Contact Information

  • Canadian Bankers Association
    Melanie Minos
    Manager, Media Relations
    (416) 362-6093, ext.220, Cell: (416) 587-7733