NCUA Restricts ATM Contract
ALEXANDRIA, Va. -- Federal credit unions can't make contracts for ATMs with third-party providers if the arrangement doesn't give the credit union an ownership or leasehold interest in the ATM.
That was the opinion of Associate General Counsel Sheila A. Albin, in a letter to Dallas lawyer Sharon Sjostrom, who was representing an unidentified federal credit union.
Albin noted that because the third party is not a credit union member, the credit union could not provide cash for the ATM. "The FCU would be providing a financial service to a nonmember for a fee and this is impermissible," she wrote.
Even though the credit union members would get free access to the ATMs, this is not the same as paying a third party in exchange for managing and administering an ATM service to members, Albin added.
She also noted that because some of the ATMs would be located more than an hour's drive from the nearest branch of the credit union, they will mostly be used by non-credit union members and therefore the ATMs are not primarily for the benefit of members.