Are U.S. banks quietly imposing capital controls with record ATM, checking account fees?

It’s costing more money to access your own money at the bank, says a new survey from a personal finance website.

According to data from Bankrate.com, the average fee consumers pay to withdraw their own money from an out-of-network ATM is now $4.52 per transaction, a record high. In fact, over the past five years, out-of-network ATM fees have soared 21 percent. In 1998, consumers paid just $1.97 per transaction.

When consumers access these banking machines, they are paying two charges: what the financial institution charges you and what the ATM owner charges you.

The charges vary from city to city. For instance, you’re more likely to pay higher ATM fees in Atlanta and New York ($5.15 and $5.03, respectively), while you’ll pay smaller ATM fees in Philadelphia and Los Angeles ($4.29 and $4.28, respectively).

Here is a chart courtesy of the Wall Street Journal:

Bankrate also made some other discoveries:

– The percentage of banks providing free checking fell to 37 percent, down one percent from last year.

– The average overdraft fee is now $33.07, up one percent from last year.

– The average monthly fee for checking accounts reached an all-time high of $15.24.

Why Are ATM Fees Going Up?

One of the reasons why these out-of-network ATM fees are skyrocketing is because of less demand.

Ostensibly, there are fewer people using ATMs, though financial institutions are still required to maintain them. A study by PULSE, the country’s third-largest ATM and debit network, found that the average debit card used per month at an ATM was just two. This is down from 3.4 ATM transactions per month in 2005.

“What’s driving that decline is the increasing use of debit cards for small ticket transactions,” said Steve Sievert, PULSE’s executive vice president of marketing, in an interview with the USA Today. “In 2005, it was pretty uncommon for consumers to use a debit card to do a transaction of less than $10 or $5. Today consumers don’t give a second thought to using a debit card for a cup of coffee. Because of that, consumers generally don’t carry as much cash as they did back in 2005.”

Moreover, consumers are taking advantage of cashback services offered at drug stores or grocery stores.

Is there something more nefarious at play here? Are banks gradually imposing capital controls to limit access to your own money?

With so many financial experts calling for outright bans on cash or the slow phasing out of cash, it wouldn’t be surprising to find that financial institutions are instituting higher fees because of this.

Indeed, higher fees aren’t necessarily a direct capital control, but it’s a tax to access your own money, and it’s going up. Banks would be in favor of a prohibition of cash because each financial transaction can be taxed and charged a fee, while bank runs would be a thin of the past.

Here is what ZeroHedge writes:

“In fractional reserve systems such as ours, banks are only required to hold a fraction of their assets in cash.  Thus a bank might only have 1% of its assets in cash. If customers fear the bank might be insolvent, they crowd the bank and demand their deposits in physical cash. The bank quickly runs out of physical cash and closes its doors, further fueling a panic.

“The federal government began insuring deposits after the Great Depression triggered the collapse of hundreds of banks, and that guarantee limited bank runs, as depositors no longer needed to fear a bank closing would mean their money on deposit was lost.

“But since people could conceivably sense a disturbance in the Financial Force and decide to turn digital cash into physical cash as a precaution, eliminating physical cash also eliminates the possibility of bank runs, as there will be no form of cash that isn’t controlled by banks.”

It isn’t just ATM fees that are soaring, but checking accounts and overdrafts. If it was isolated to out-of-network ATMs then you could make the case that it was just a matter of demand. However, when everything is becoming more expensive just to access your own money then questions need to be asked.