ATM Fee Disclosure Change Sought by Trades
Credit unions, along with banks, independent ATM deployers and convenience store operators have asked two congressional committees for legislation to remove an ATM disclosure regulation that has inspired lawsuit trolls.
The organizations writing the letter included CUNA, the ABA, the American Gaming Association, the ATM Industry Association, the Electronic Funds Transfer Association, the ICBA and the National Association of Convenience Stores.
In a letter this week to the House Committee on Financial Services and the Senate Committee on Banking, Housing and Urban Affairs, the group asked lawmakers to eliminate an ATM disclosure requirement in the Electronic Funds Transfer Act.
As currently interpreted, the law requires an ATM deployer to post a disclosure of transaction fees on both the video monitor and the body of the ATM and makes the deployer vulnerable to litigation if there is no disclosure posted on the machine.
This, the organizations wrote, has spawned a host of lawsuits from litigants who, the letter alleged, have removed the posted notices and then photographed the machine without them and sued.
Credit unions, banks, and convenience store owners have all faced these lawsuits or the threat of them, and while the payouts have generally not been large in individual cases, they have nonetheless become a nuisance and a needless expense.
The organizations argued that the part of the EFTA that has allowed these lawsuits has outlived its usefulness.
“A physical placard fee notice may have played a useful role when Congress first enacted the statutory provision in the 1990s,” the group wrote. “At that time, off-premise ATMs were relatively uncommon, and some consumers might have been unaware that they may be charged a fee for using an ATM. Also, many ATMs were not capable of providing the notice on the monitor.”
But since then, the groups noted, off-premise ATMs have grown to more than half the ATMs in the country and asserted that fees have become an expected part of the ATM experience.
“Today, consumers expect to pay a fee at an ATM unless they are using an ATM owned or operated by the bank or credit union where they have their account or their financial institution has agreed to pay for the use of the ATM,” the group added.