ATM fees are the charge that foreign ATMs charge you to use their machine. They are common in the US; I have never been charged an ATM fee in Europe.
I almost switched my stock account to Swab years ago because they told me they do not charge a "currency conversion fee" for foreign transactions. I don't know if that is still true. I now have an investment account debit card with Wells Fargo, which charges my $5 per ATM transaction in Europe. If I convert $500 at the ATM, that's 1%.
If you withdraw euro from an ATM in Europe today, you will have to pay for the difference in currency value. That is, to get 100€ today, you will have to give them $107.95. That is just due to the difference in international value of the currencies. To that rate, various institutions add their own fees. The "Network", collectively Visa, MasterCard, Plus, Star. et al) charge 1%, about half for currency conversion, half to servicing the account - i.e., physically paying the ATM owner in euro and collecting from your bank in $.. Credit unions and small banks often just pay the 1% Network fee; big banks, like Bank of America pay the network in US$, then charge you a fee for the service, which can be as high as 3%.
If you use a credit card or debit card to make a purchase in Europe, your bank will likely charge you 3% on top of the currency difference. So you are probably better off paying in euro you get from an ATM at 1%.
Also, be aware of something called Dynamic Currency Conversion, where the vendor (restaurant, hotel, etc) offers to charge you in US dollars. They will use a currency conversion rate very favorable to them (not to you). Then, since it is still a foreign transaction, your bank will charge you 3% anyway. You'll end up paying currency conversion fees twice. I had never seen DCC at an ATM until I used a Reisebank ATM in Würzburg. It wasn't obvious it was DCC; they tried to sneak it in surreptitiously.