In case you haven’t heard, Bernie Sanders really doesn’t like banks. He truly detests Wall Street banks, but Main Street banks aren’t exactly his bag, either.
And neither are facts, or financial literacy.
On Tuesday, a tweet from his account drew a lot of derision from conservatives on Twitter, including yours truly. Here’s the offending message:
“Each time”? I don’t know about you, but I might pay an ATM fee once or twice per year, on those occasions when, for the sake of convenience, I knowingly use a machine not owned by my bank. It stings, and I avoid doing it as much as possible — and those are the exact reasons those fees exist.
A Sanders defender joked about the cost of “moving electrons,” (yeah, bro, right on!) but there are actual costs incurred for the purchase, installation, maintenance and especially the stocking (with cash, not electrons) of ATMs. Banks would prefer not to have non-customers taxing their resources and impose fees to discourage them from doing so. (Of course, this isn’t the only model: Some banks choose not to build and maintain a network of ATMs and instead reimburse customers for the fees they incur when they use other banks’ machines.) And it’s no coincidence that ATM fees, and other charges, have gone up since Democrats put caps on other bank fees with the
But back to those words “each time.” I figured it was possible to find out exactly how often ATM users pay fees, and indeed a 2013 report from the Government Accountability Office has just those statistics.
Using 2011 data, the GAO found that financial institutions charged a fee for ATM usage about — drum roll, please — 8.4 percent of the time. That’s one out of 12 times, not “each time.” In fact, people used U.S. banks’ ATMs more than 3 billion times that year without incurring a fee.
Now, there is one group of ATMs that did charge fees almost all the times they were used. These are the ones run by “independent ATM operators” — think the generic-branded machine you might find at a gas station — and they charged fees for 93.3 percent of transactions. That sounds like a lot, until you consider that people used bank-owned ATMs about 22 times as often as these independent ATMs, almost certainly because of those fees. They are there purely for convenience, and they charge a price for that convenience: Remember, there’s a cost to ensuring they are available, with cash to dispense, on those occasions you can’t make it anywhere else. In any event, if we add those transactions to the ones at bank-owned ATMs, we have a grand total of 12 percent of the time that people paid fees at ATMs in 2011.
That neither Sanders nor his supporters understand all this — or maybe just don’t want to acknowledge it — is not surprising. His entire campaign is built on a foundation of financial and economic illiteracy, the notion that just because some other people have more money than the rest of us, we can take it from them, on and on and on, and only good things will happen. This makes for good fairy tales, but bad policy.