Ben Nelson: I Don't Know How to Use an ATM

AP

The Senate just narrowly voted today to end debate on financial reform, even though a number of amendments to the legislation were never considered.

One amendment never debated was a proposal from Sen. Tom Harkin (D-Iowa) to cap ATM fees. The Senate's lack of interest in the issue may stem from a lack of experience with ATMs -- at least in the case of Sen. Ben Nelson (D-Neb.), the Omaha World-Herald reports.

When asked about the amendment, Nelson said he is unfamiliar with the charges incurred when a customer uses an ATM not affiliated with his or her bank.

"I've never used an ATM, so I don't know what the fees are," Nelson reportedly said, adding that he gets his cash from bank tellers, just not automatic ones. "It's true, I don't know how to use one."

"But I could learn how to do it just like I've... I swipe to get my own gas, buy groceries," he continued. "I know about the holograms." The World-Herald reports that by "holograms," Nelson was referring to the bar codes on products read by automatic scanners.

Nelson's remarks are reminiscent of the wonderment former President George W. Bush expressed upon viewing electronic grocery price scanners in 1992.

Harkin reportedly said he uses an ATM card "once every couple weeks."

"Consumers are being charged ATM fees that are well in excess of the cost of providing services, in some instances, as much as $5 per withdrawal," Harkin said in a May 4 statement announcing the introduction of his amendment. "These fees are outrageous, are anti-consumer, and they need to be reigned in."

Harkin tried vigorously to get a vote for his amendment, leading to a heated exchange with Senate Majority Leader Harry Reid, the Huffington Post reports.

"What kind of games are being played around here?" Harkin reportedly asked Tuesday night. "I've had this amendment pending ever since the beginning. And I have not been allowed to bring it up. "

[SenViejo]

Sen. Nelson's unfamiliarity with ATMs and his ignorance of ordinary people's financial struggles and the sufferings of the unemployed, somehow qualifies him to make decisions affecting the lives of real people. Fortunate for him that he is insulated from the marketplace, sitting in the Senate. When will this closet Republican who is in the pocket of vested interests, give up his salary? His salary cannot be paid to him, because it would increase the deficit. Unless it can be paid for without increasing the deficit, how can he vote to withhold unemployment payments to those in need for this reason? Yeah!- let's see how long he would put up with that which he would do to others!!!

[SenViejo]

Sen. Nelson's unfamiliarity with ATMs and his ignorance of ordinary people's financial struggles and the sufferings of the unemployed, somehow qualifies him to make decisions affecting the lives of real people. Fortunate for him that he is insulated from the marketplace, sitting in the Senate. When will this closet Republican who is in the pocket of vested interests, give up his salary? His salary cannot be paid to him, because it would increase the deficit. Unless it can be paid for without increasing the deficit, how can be vote to withhold unemployment payments to those in need for this reason? Yeah!- let's see how long he would put up with that which he would do to others!!!

[tsigili]

Good for you. Some things, you are better off, without.

[GianniDV]

1) Convenience will be cut away from consumers and 68% of the 482,000 ATMs in the USA will go away immediately from independent operators because they will not be profitable or sustainable.
2) People will be forced to drive further wasting precious time and gas and hurting the environment;
Consumers will have to pay the maximum of .50 since the Banks have now had to try to break even on their ATMs (however most of these ATMs will be gone in an ATM wasteland/junkyard or parted out since only the very high volume ones will be available since the revenue has been cut and sustainability of the ATMs is impossible) at their own bank while also cutting hundreds of thousands of jobs from manufacturers, independent operators, technicians, sign makers, electricians, installers, home depots, etc
Merchants who get charged 2%+ or more per swipe to accept credit cards. Since there?s no ATMs nearby, merchants cannot put a $10.00 minimum or protect themselves in any way from merchant fees on very small items which they are losing money on to sell, and therefore, an unknown % of transactions of the 35% that are done in cash still (65% of transactions are credit/debit, 35% are in cash a recent nationwide recent study shows) of transactions that are still done on cash multiplied by (2-3% + .35cents/swipe) multiplied by millions of transactions shift money into the private sector instead of in the hands of industry related employees. These are ATM industry related employees that would actually spend the money and stimulate the economy through the purchases of more goods and services though the money multiplier effect. (Thereby increasing GDP). This bill would create huge lines in the unemployment offices.
I am an Economist and in the past investment banker with 3 major banks and insurance companies, so I know what I am talking about. I like the novel idea of limiting fees, but the market needs to dictate the price. I agree with Wall Street reform on the incentive structures on which Advisors get paid, however, this doesn't make sense fundamentally with America, capitalism, or free-market enterprise. This will not hurt the industry, it will completely kill it altogether, along with technological advances that came with it, including red-box style ATMs, and other types of ATMs that don't just dispense money--ones that in the future will dispense convenient items such as extra cell phone batteries, chargers, food, (even gold in Dubai for instance), or, better yet, green friendly recycling electronics (check out Eco ATM in San Diego).
More on increases on credit card usage, artificial inflation, the shift of money into a non-reproducing private sector with limited jobs, and basically, an oligopoly (visa/mc amex/discover etc)
In fact, the only people that MIGHT slightly benefit (albeit an ambiguous effect) will be Visa, MC, and AMEX if ATMs phase out and we use an electronic currency system, which is SCARY to say the least what the government could do with that type of power. Finally, merchants, small businesses, etc, will be forced to pay Visa/MC/AMEX 2-3% + .35 cents per swipe on average to process transactions. When you look on a small level, that doesn't look too bad, but when companies are getting 10% NOI profits, 2% of that now becomes TWENTY (20%) of their profits! Going to a private sector which won't go to pay industry related employees, and merchants (who receive a small benefit from the ATMs (about 25% of the ATM operators profits) which will hire less employees, have less money to fix their little shop, gas station, etc. THIS WILL CAUSE MARGINAL ARTIFICIAL INFLATION because companies will be forced to increase their prices marginally to offset the lost revenue due to processing transactions. 2% to be exact, which would be devestating to our inflation rates considering we already are pushing the limit with the fed printing money and shifting money supply to the right. So, a cash paying customer is actually paying for the convenience of credit paying customers. Bottom line, somebody has to pay money at some point to allow this money to be accessed easily. Isn't this the point of currency? Replaces the bartering system? Well there's a cost to protect it (banking) in vaults for instance, and there's overhead to cover. The banks have to make it somewhere. If anything, independent ATMs will help keep major big banks from increasing prices, the competition drives the prices down.
This cuts jobs, lowers convenience, and shifts money to a private sector that is not producing jobs. It will shift consumer surplus to producer surplus, which is the opposite effect we are going for in the Economy. GDP will slow, velocity of money will slow, efficiency will decrease. I can go on and on!
Wow, mouthful, but I am an economist so you really have to look at the big picture here. Plus, artificial price control is a very thin line. What's next, government or price fixing on everything?

[GianniDV]

"I don't believe in a Government that protects people from themselves." -Ron Reagan
The REAL marginal cost on average to process a transaction is about 1.75$ not just the 36 cents they mention. That is a statistic from 1997. Count in inflation and several other unrepresented costs and the marginal rate increases by a LARGE amount.
The only reason big banks are able to offer free ones for their customers are because there's just enough non customer transactions to offset the costs associated with tying up a huge sum of capital, which is from 10k and up to 100k per location (especially the large banks ATMs). Also, money sometimes takes 3-4 days to hit your account, every week in fact on weekends and holidays--which happen to be the busiest. That means even MORE capital needs to be tied up. Opportunity cost of money + the fact that banks basic revenues come from lending money mean they have that much less money to lend so they need to be profitable. Trust me, I'm certainly not a Defender of the big banks but economically the ATM industry has to make a profit to offset costs, which have gone up recently only because of the credit crunch and inflation. When it turns around, supply and demand and innovation will lower costs of machines and will drive down the price. This has already started to happen.
The only reason you see more and more ATMs is because they have gone from 10k a piece to 3k a piece. So now independent operators can offer lower prices over time as competition increases. Price capping the industry will not just hurt the industry, it will completely kill it and even have an OPPOSITE EFFECT--
Opposite Effect:
Banks will start charging their own customers since they won't be able to make enough on the .50 cent transactions on the non customers. For example, if a Major Wells Fargo ATM does 10,000 transactions, and 70% are from customers and 30% are for non customers, and the average withdrawal is $80.00 (which is an industry average,) then the bank must put in $800,000 in cash on a monthly basis, or $200,000 per week. They must also pay Brinks or an armored-car service upwards to $240 per drop, each week, or each time there is a service issue or bill jam. That?s $200,000 that they are not earning interest on or leveraging on investments, include the cost of the machine, insurance, depreciation, etc, we are looking at large investments. In ORDER FOR THE BANKS TO OFFER FREE WITHDRAWALS TO CUSTOMERS, in this situation, 7,000 of the 10,000 transactions, the bank NEEDS to make money on the remaining 3,000 transactions--which will go to offset the overall cost. Say for instance the surcharge is $3.33 * 3000 transactions = $10,000 per month in profit. Sounds good, but subtract $240 * 4 for four drops, emergency calls, $50,000 on a new machine, and opportunity cost of money that could have been lended or leverage 10 to 1 (with the reserve ratio at .10) -- you can only imagine, banks are breaking even barely with the ATMs as they are now. If the fee is capped to an ARBITRARY NUMBER, like .50 cents for instance ..50*the same 3,000 transactions is only $1,500. The banks would shut these ATMs down because now they?re to the point of a loss. If ANYTHING, they will start charging THEIR OWN CUSTOMERS .50 so they at least can make .50*10,000 or $5000.00 They?re still losing money -- get the picture?
You see, the market already has dropped the price as low as the banks can go. The only reason Independent Operators exist is because we can buy more inexpensive machines because of the growth of the industry, technology, and innovations--which have been produced through private incentive to create better, faster, and cheaper machines. The way I DRIVE traffic to my ATMs is I specifically undercut the Big Banks--we are here to help keep their costs down. We are competing. The system is working. I have overhead costs and investors as well. We need to keep independent operators. Remember banks came out with ATMs as a direct RESPONSE to demand from consumers.
More ATMs in itself are a CLEAR EXAMPLE of the consumer surplus created by Big Banks COMPETING and offering more and more free services/atms to get more clients. These are self sustaining services (barely as they are now) that will not be able to operate with these cuts! THE RESULT?

[bradkt1]

This privileged idiot is so out of touch with reality...and yet he votes "no" on a piece of legislation that would limit ATM fees.

He has to go.

[zball--2008]

Half the ATMs in the country are owned by private companies that depend on the convenience (surcharge) fee. Without that fee hundreds of small businesses will die and thousands of people will lose their jobs. While this may initially hurt banks, it will absolutely destroy small business ATM owners. If this passes, even though the wording has been changed to a "reasonalble" amount, there is no doubt that the small ATM businesses will suffer. Hundreds of companies could go out of business. There are real people working in armored car companies, service companies, ATM manufacturers, vault cash providers, telecommunication providers, help desk technicians, etc. that will be out of work. After all, the proliferation of ATMs added a level of convenience for consumers. We don?t have an inalienable right to use an ATM. It is a great convenience, but that time saver (saving a trip to the bank) costs money. Users exchange money for a trip saved.

[stn_sage]

Oh, great! Nelson again, huh?

First, this guy 'hosed the public' by tying up the Health Care bill.

And now, because he doesn't use an ATM card, he probably doesn't care
that the industry is charging excessive fees on each individual use, no less!?

This guy has to be replaced by the voters! He's sticking it to the public!

And, it appears that Reid is allowing the card issuers to stick it to the public! By suppressing Harkins' amendment!

Yes, I hope some of these politicians get their real worth and justice
in the next life, if not in this one!