CUNA has urged the Consumer Financial Protection Bureau to suspend a duplicate automated teller machine notice requirement that is being used by some as the basis for lawsuits against credit unions and other financial institutions.
In the letter to the CFPB sent today, CUNA President/CEO Bill Cheney said that legal challenges are arising because ATM notices required under Regulation E have been removed, damaged or destroyed without the institution's knowledge.
Under federal rules, Cheney wrote, ATMs are required to display a notice that a fee may or will be charged. He added that the ATM screen (or paper disclosure) is also required to provide detailed disclosures prior to the payment of the fee.
However, Cheney said the outside notices on ATMs are, in some cases, intentionally removed, destroyed or damaged and that pictures are then taken of the ATM to show noncompliance. The pictures are then used by those bringing lawsuits as proof that the credit union is out of compliance–even though the screen or paper disclosure is still displayed.
Under current rules, plaintiffs may be awarded damages as well as attorney fees if they prevail in the lawsuits, Cheney said.
To address the growing problem of lawsuits, Cheney urged Acting CFPB Director Raj Date to use the agency’s power to revise Reg E to no longer mandate the duplicate notices on the ATM screen or paper and those attached to the outside of the ATM itself.
“We urge the agency to undertake a quick review of this and suspend the duplicative ATM notice requirement, which the agency is authorized to do under the EFT Act,” Cheney wrote. “If you feel that is not possible at this time, at the very least, the CFPB should announce it will work with us and others, including consumer groups, to seek legislation immediately that will put an end to these suits.”