We all remember our first car. I remember my automated teller machine. Actually, details of that particular unit had somehow slipped my memory until today. Rooting through a pile of ancient paperwork headed for the shredder, I unearthed a letter from my bank, postmarked June 1979. I was a teenager and the Waterville Savings Bank was writing to let me know about my responsibilities as holder of my first ATM card that was enclosed. “Welcome to the world of the B.A.T.,” the letter said. That apparently stood for Bank Any Time machine. Why I kept a letter like this for 33 years is beyond explanation. To say it prompted nostalgia is just plain weird.
I am not sure that Waterville, Maine, was first in line for the very first ATMs on the planet, but I remember this B.A.T. thing was the first one I had ever used. The early ATMs had a dreaded feature that still terrifies me to this day. They would sometimes eat the card: You would stick the card in, but it might never check out. What I realize reading this ancient document is that the card-eating might have been a design feature rather than a bug.
Here is how. The letter cautions that owners of the B.A.T. card must not attempt to take out more money than they had on deposit. The words “must not” were underlined. If that happened, the bank said it would be forced to reclaim the card and “the next time you use it the machine will take it away and not return it.” Then came my very favorite moment in the letter. “This could be embarrassing both to you and to us.” Somehow I can’t imagine my current bank, an intergalactic financial conglomerate, could ever feel embarrassment.
It is the end of the letter that is most relevant to today. My old hometown bank emphasized that machine does not, underscore NOT, give the customer a line of credit or overdraft banking privileges. Those programs are, however, “on the drawing board for future implementation.”
In the decades that followed, banks got very good at implementing those programs. These days, if you pull out more money than you have, the machine will probably not lock up the next time. What will happen are fees, lots of them. In Washington, the new Consumer Financial Protection Bureau has just said it’s launching an investigation into overdrafts.
The CFPB has data showing that these fees are a big problem especially for younger customers, with more than 46 percent of young adults paying them. The bureau is also looking at allegations that banks look at all the withdrawals a person does in a single day and processes them in the way that is most likely to trigger a penalty. Banks, for their part, say customers want their transactions to go through and that is what the overdraft system allows. The CFPB’s overdraft report is due late this year. I’ll try not to keep that paperwork as long as I kept the ATM letter. As long as I shred it before the year 2045, I will be ahead of the game.
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