House to Debate Bill Modernizing ATM Signage Requirements

On Wednesday, June 27, the House Financial Services Committee is scheduled to consider H.R. 4367 which seeks to eliminate Regulation E’s current dual fee notification requirement. If this bill becomes law this year, consumers will not be impacted. Any individual wishing to draw cash at an ATM or inquire on his or her balance will receive the required fee notice on the screen. And, he or she must affirmatively acknowledge the fee before the transaction can be executed.

Prospects for the committee approving H.R. 4367 on Wednesday are strong. The House bill currently has 120 cosponsors including more than half the Financial Services Committee. The Senate companion bill (S. 3204) has 16 cosponsors. The House and Senate bills are enjoying strong, bipartisan support. If the Committee approves H.R. 4367 on Wednesday, it moves to the full House for consideration (mostly likely in July).

In recent years, ATM owners and operators have been beset by a spate of lawsuits from plaintiff attorneys alleging Reg E violations. In many of these cases, unscrupulous individuals are physically removing (vandalizing if you will) the ATM stickers and forwarding photos to these attorneys. Many ATM operators  deploy small fleets of ATMs and face the option of costly litigation or settlement (not a good option either way for small business in America).

Please come back next week for a status on the Committee’s consideration of H.R. 4367 is its next steps along the legislative process.

Redundant ATM Signage: Summarizing the Issues

In a five-minute interview, Kurt Helwig, president and CEO of the Electronic Funds Transfer Association, analyzes the issues involved in the recent spate of lawsuits involving fee notification signage on ATMs. For a background on the issue, scroll back to previous posts "ATM Fee Signage (Continued)," posted January 2012 and "ATM Fee Disclosure: Updating Regulations to Limit Jackpot Justice," posted December 2012.

Last week Representatives Blaine Leutkemeyer (R-MO) and David Scott (D-GA) introduced a bi-partisan measure that would eliminate the requirement for redundant physical signage on ATM terminals. Last week Reps. Leutkemeyer and Scott sent a letter to their colleagues inviting co-sponsors on the bill. Read that letter here.) For analysis of the Leutkemeyer-Scott bill see our post below of April 20, "H.R. 4367: Beauty in Simplicity."

In this short interview, Mr. Helwig lays out the issues and history of the problem and looks at the chances of success for legislative or regulatory relief.

ATM Fee Signage (Continued)

According to the Beaumont Enterprise a New York man is suing a Texas credit union alleging that it failed to post a notice on one of its ATMs stating the cost of using the machine, as required by the Electronic Funds Transfer Act.

Five weeks ago we blogged about lawsuits over fee notification which are costing the financial industry big bucks. I'm sure there are cases where the disclosure notice was missing from an ATM. The court will decide if this case is one of them. But the costs of the nuisance suits will eventually be passed on to consumers like in every other industry. In "ATM Fee Disclosure: Updating Regulation to Limit Jackpot Justice" we made the argument that nuisance lawsuits over this issue have become a get-rich quick cottage industry.

I know some people find it shocking that banks actually charge people - with whom they have no commercial relationship - to use the bank's equipment. Next thing you're going to tell me is that if a perfect stranger knocks on my door and wants to use my car I can't charge him for the gas.  

According to the court filing, the plaintiff in this particular case claims that that he used an ATM of the Firestone Community Federal Credit Union  in Orange and was charged two bucks, and that the fee notification was not posted on the machine as required by law.

If the plaintiff is successful in his legal quest, what would be the remedy? I personally think he should be compensated. I think a fair number would be - two bucks. If I ran Firestone Community FCU I'd issue him a bank check for two dollars and point him to one of the Lone Star State's many fine check cashiers. See how he likes those fees.

At some point ATM signage suits become frivolous. I would think, given the publicity that this issue has received within the credit union industry, that any credit union or bank would be crazy not to make sure by now that their fee notices were plastered to their ATMs with Gorilla Glue, Mighty Putty or something used in the space program.

Meanwhile, speaking of deciding,  I think its time for Congress to decide whether this whole thing over ATM signage has gotten out of hand. It's time to recognize, 15 years after ATM owners started charging for the use of their property, that fee notification on the screen, which is much more secure and visible, fulfills the intent of the EFT Act.

That's my opinion. What's yours?