<p>DES MOINES, Iowa – With the ATM surcharge rules here forever changed, individual Iowa credit unions are trying to figure out their positions on this controversial consumer issue. "After the ruling we continued to support the attorney general and were really disappointed that there would not be an appeal," said Iowa Credit Union League Vice President of Public Affairs Murray Williams. "So we felt someone here needed to be a consumer advocate." As the last state in the country to ban ATM surcharges, the ICUL knew it was just a matter of time for the ban to be challenged. According to Williams, for the past one and a half years the league has been doing research on how the landscape would change and what credit unions could do to continue to survive here. The other shoe dropped in early March when Federal District Judge Ronald E. Longstaff sided with five national banks – Metrobank, Wells Fargo Bank Iowa, Bank of America, Firstar Bank and U.S. Bank – and ruled that the Iowa law banning such ATM fees is pre-empted by the National Bank Act. Banks and credit unions alike now seem to be in a holding pattern. Banks Wells Fargo and Firstar are still trying to determine what the convenience fee would be. For some, like Wells Fargo, the amount if any would be based on a calculation of the cost of investing in ATMs across the state. Nationally, 90% of banks charge convenience fees at an average cost of $1.50. John Deere Community Credit Union Vice President of Finance Monte Berg says it is too soon to tell what the long-term impact of the ruling will be on credit unions here, and his credit union is still weighing its options. Many credit unions here are also researching the best action to take. "We're still looking at different avenues and weighing what is best for our membership and balancing the credit union cost earning," said University of Iowa Community Credit Union Assistant Vice President/Assistant Branch Manager and Head of Member Services John Strabala. "The real truth is that unfortunately there may not be a lot of choice left for consumers here. The reality could end up being use your own institution's ATM or get nicked with a fee. That may end up being the reality but at what pace who knows?" To help give consumers a choice and prevent that future, many credit unions, community banks and smaller banks are considering participating in SHAZAM EFT network's Privilege Status Program. Privileged Status allows members/customers of participating financial institutions to use each other's ATMs with no surcharge fees while expanding the number of surcharge- free ATM locations available. According to Williams, it is an option credit unions should look into. As long as the credit union owns at least one ATM there is no fee to join. Those without an ATM pay a transaction fee. "A lot of financial institutions here are in the same boat," said Williams. "The main reason banks pushed for the surcharge is not only for added revenue but also customer acquisition. Once the surcharge comes about the position will be `if you don't want to pay it then come to our bank'. Banks will try to get rid of the competition first then they will have free reign to raise fees higher and that is bad for everyone." Just the five banks involved in the lawsuit own 410 ATMs in the state representing 17% of the total ATM base. Credit unions participating in the Privileged Status program have a total of 350 ATMs and the remaining credit unions not in the program have a total of 150 ATMs. So far there are 130 financial institutions participating in the Privileged Status program, and Williams expects the number to really grow this year. According to Williams, looking to growing research and what happened in Connecticut once its surcharge ban was overthrown, consumer behavior changes Iowa credit unions can expect to see include the number of ATM transactions to decrease dramatically; larger withdrawal amounts; POS cash back increases; debit card use to jump up; and teller or drive-up window use to increase. "Our focus has been how to help credit unions survive," said Williams. "The rest of the country had to deal with this for so long and we are taking a really hard look at how a lot of other credit unions have survived. We encourage credit unions here to figure out their stance on surcharging and communicate that to members as soon as possible. We may think the ATM market here is already saturated, but the data shows that more and more ATMs will continue to be deployed." Consumer education is another option for credit unions here. ICUL is working on developing a campaign not only through credit unions but through the media directly that ties in the idea of ATM surcharging and what can be done to avoid the fees. By creating a more aware consumer in the early stages credit unions can then customize the campaign to their members said Williams. Members have been relatively quiet on the subject, but Williams predicts that there won't be an uproar until one of the large financial institutions imposes a big surcharge. "The first person to use that ATM will probably have a television crew asking how he or she feels about the surcharge," said Williams. "That will be the big hit. Right now credit unions just have to be as proactive as possible so that members stay informed and credit unions come out ahead." [email protected]</p>