CUNA said Thursday it is urging a West Coast federal appeals court to uphold a lower court decision defining how credit unions and ATM vendors qualify for immunity from liability for missing “fee decals” and the lawsuits they have spawned.
In the “friend of the court” brief filed in the U.S. Court of Appeals for the Ninth Circuit in San Francisco, CUNA argued that the court should uphold that “ATM operators are not required to establish the identity of the vandal or third party that removes an affixed fee decal in order to establish immunity from civil liability under the safe harbor defense” under federal law.
CUNA said that adoption of this standard would mean, in effect, “that missing stickers are presumed to be the work of vandals for which credit unions will not be held liable.” Doing so would recognize that ATMs are remote, unmanned, and often beyond any practicable means of surveillance.
Further, the trade association argued that – as found by the lower court – the appeals court should affirm that good faith compliance “should be measured by a standard of reasonableness under the circumstances applicable to the particular ATM and its operator.”
Doing so recognizes that a one-size-fits-all solution does not address the realities of a diverse, decentralized ATM industry whose financial institutions and other members endeavor in good faith to comply with the EFTA and Regulation E, CUNA argued.
Under this approach, CUNA said smaller institutions, with their limited staff, would not be held to an unreasonably high standard concerning the monitoring of their machines.
“Our filing in this case is of critical interest to credit unions facing numerous lawsuits over ATM signage,” said General Counsel and Executive Vice President Eric Richard. “Just as CUNA seeks results for credit unions in Congress and with regulators, we look for effective opportunities to seek protections in the courts.”