Federal NDP Leader Jack Layton called Thursday for legislation restricting bank-machine fees.

The party has proposed changes to banking laws that would eliminate fees for using automated banking machines.

"We believe it's gouging when a person comes up and they want $40 or $60 of their cash and a bank is charging them $1.50 or $2, $2.50," Layton said. "That's a rate of payment which is very, very high — and unfair."

Canadians made 707 million ABM cash withdrawals in 2005, according to the Canadian Bankers Association — some of which are transactions at a customer's own bank's ABMs, which aren't subject to the extra fees. 

Another 264 million deposits were made using ABMs in 2005. Canadians paid about $420 million in charges to cover ABM transactions, according to Layton.

But the CBA issued a statement in response to Layton's announcement, saying the banks charge fees to help pay to maintain their ABM networks. Raymond J. Protti, president and CEO of the CBA, said in a release banks charge consumers a convenience fee when using a competitor's account to be fair to their own customers.

"It's like saying to clients of a gym, 'we're going to let customers of other gyms in to use the weight room. We're not going to charge them, and you'll be subsidizing their use of it,' " Protti said.

Last December in question period, NDP finance critic Judy Wasylycia-Leis pressed Finance Minister Jim Flaherty to legislate the end of competitor automated banking machine fees. She noted that banks in other countries, including the U.K. and U.S., do not charge additional fees when a consumer uses a competitor's ABM.

"TD Bank doesn’t think its American customers should have to pay these fees — only its Canadian customers. British banks don’t charge these fees either. Why do people in the U.S. and the U.K. get a break from their banks, but ordinary Canadians get gouged?" Layton said.

The CBA disagrees, saying banks that don't charge ABM fees recover their losses by charging more for other products and services.

"In Canada, we have a user-pay system that is transparent and fair," Protti said. "And U.S. bank customers pay 15 per cent more than Canadians do in convenience fees."

In Ottawa, Finance Minister Jim Flaherty said he has already written to the banks to ask about the fees.

"The practice by some banks in some other countries is not to charge," Flaherty said.

"Is there a justification, is there a rationale, for that being particularly different in Canada than in other places?"

In January, after a two-day party meeting, Layton said the NDP planned to press the issue of high interest rates. Layton said the banks charged average Canadians exorbitant interest rates and went on to enjoy a record annual profit of $19 billion last year.