DES MOINES, Iowa - Which federal law governs ATM surcharging by national banks-the National Bank Act or the Electronic Funds Transfer (EFT) Act? Once again this question has moved to the center of the ATM surcharging argument being hotly debated, just as it did in Connecticut, Santa Monica and San Francisco. Now the debate has moved to Iowa. Last fall, after losing its case by a 2-1 decision against Bank One and the Comptroller of the Currency in the Eighth Circuit Court of Appeals to block the bank from assessing surcharges from non-customers who use the bank's ATMs, state Attorney General Thomas Miller's office and Iowa Banking Superintendent Holmes Foster Feb. 2 filed a "petition for a writ of certiorari" with the U.S. Supreme Court to hear the case of Holmes Foster, petitioner, in his official capacity as Superintendent of Banking and Administrator of Electronic Transfer of Funds, Iowa Division of Banking, Iowa Department of Commerce v. Bank One, Utah, National Association, and Comptroller of the Currency. Holmes and Miller are asking the U.S. Supreme Court to uphold Iowa's Electronic Funds Transfer (EFT) Act they say governs ATMs in the state and prohibits surcharges. "We are asking the Court to uphold Iowa's law that requires universal ATM access without surcharges to all cardholders in the State, no matter who controls the ATM machine a consumer is using," AG Tom Miller said. "We urge the Court to take up the matter because several key principles are at stake," he added. "First, it's a matter of protecting consumers. Iowa's law protects all ATM users in various ways, including prohibiting surcharges against cardholders simply for using an ATM. We also argue for the basic principle that consumer protection is a traditional power of the States and should not be preempted." The dispute between the state AG and superintendent of banking with Bank One goes back to 1997 (Holmes' predecessor Michael Guttau was named in the original case) when the bank violated state law by installing ATMs in several Sears, Roebuck & Co. stores in Iowa even though Bank One had no office, branch or agreement with a financial having an office in Iowa. But it was Bank One's challenge of that state law and its argument that national banks are excepted from Iowa's ATM law by the National Banking Act, and the subsequent intervention by the Comptroller of the Currency on the side of Bank One that drew out the federal v. state, EFT Act v. National Banking Act arguments (CU Times, Sept. 15, 1999.) Superintendent of Banking Foster pointed to the ambiguity of language in the federal EFT Act as the cause of the problems and the ATM surcharge-related legal cases that have ensued nationwide. Referring to section 15 U.S.C. of the EFT Act - "A State law is not inconsistent with this subchapter if the protection such law affords any consumer is greater than the protection afforded by this subchapter...", Foster offered that, "Congress needs to amend the EFT Act and clarify the language concerning surcharging and universal access so that it's fairer and better protects consumers. Given the growth in interstate banking, this is imperative. It is neither practical nor effective for each state to have its own regulations." In related news, attorneys' general for nine states have announced their support for a ban on ATM surcharging. The nine AGs are from California, Connecticut, Iowa, New York, West Virginia, Nevada, Oregon, Washington and Minnesota. -
ekingoff@cutimes.com
