Legislation that would eliminate the ATM placard disclosure requirement was unanimously approved by a House Financial Services Committee voice vote to report it out Wednesday; and, according to CUNA, H.R. 4367 could see a full U.S. House vote soon after the July 4 recess.
The bill would eliminate portions of Regulation E that require credit unions and other financial institutions that provide ATM services to display a physical notice on the ATM that a fee will be charged.
Under the legislation, ATMs would only be required to display the ATM disclosures on a screen, and give ATM users the choice of opting in to such a fee.
These ATM disclosure requirements are creating issues for credit unions and other financial institutions that continue to be subject to frivolous lawsuits.
CUNA said outside notices on ATMs are, in some cases, being intentionally removed or destroyed, without the financial institution's knowledge, and that pictures are then taken of the ATM to show noncompliance.
Some ATM users may then use this as evidence of apparent non-compliance and as grounds for lawsuits, and the number and cost of these lawsuits continues to climb.
“Repealing this outdated and unnecessary duplicative requirement would cause no harm to consumers. They would still be notified on the ATM screen of any fees and still have the ability to decline those fees and terminate the transaction. However, failing to stem the tide of these baseless lawsuits could threaten consumers’ access to ATMs, especially in rural areas and locations that are prone to this vandalism,” said Committee Chairman Spencer Bachus (R-Ala.).
H.R. 4367, introduced by Reps. Blaine Luetkemeyer (R-Mo.) and David Scott (D-Ga.), has 127 cosponsors. A similar Senate measure, S. 3204, has 17 cosponsors.
“This bipartisan legislation will prevent nuisance lawsuits that are being pursued by unscrupulous people across the nation and I am pleased that we are moving forward quickly,” Luetkemeyer said. “Everyone realizes this is a situation that has to be fixed and I look forward to moving this bill through the House.”
CUNA President/CEO Bill Cheney said committee approval is "a big step toward rectifying a problematic case of regulatory redundancy.”