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News Now

CU System
Illinois Gov. Signs League-backed ATM Disclosure Bill
NAPERVILLE, Ill. (8/26/13)--Illinois Gov. Pat Quinn has signed HB 2432, which will make it clear that Illinois credit unions and other deployers of ATMs are no longer required to display a physical sign disclosing ATM terminal fees, according to the Illinois Credit Union League. Quinn signed the law on Aug. 16.

The legislation provides parity with federal requirements regarding ATM disclosure.  Previously, the federal Electronic Fund Transfer Act mandated that ATMs contain both a physical sign and an on-screen, electronic sign to notify consumers of fees imposed when conducting a transaction.

"Now that HB 2432 has been signed into law, parity with federal law and regulation will be retained," said Stephen Olson, ICUL executive vice president and general counsel. "This measure provides credit unions that deploy terminals with relief from the risk of frivolous and spurious litigation, without impairing a member's awareness of the fees assessed for using the ATM."

In December 2012, President Barack Obama signed federal legislation removing the requirement for the physical sign, keeping intact the requirement for electronic disclosure of fees and an opportunity for the cardholder to cancel the transaction before incurring any fees.

Outside notices on ATMs were being intentionally removed by unscrupulous persons, without the knowledge of the financial institutions deploying the terminals, said the league. Perpetrators would then take pictures of the vandalized machines and file suit against the financial institutions alleging they were not in compliance with applicable disclosure rules. The federal law, as amended, helps mitigate this frivolous lawsuit-risk factor, said the league.

HB 2432 contains language to mirror the changes made to federal law by deleting the duplicative requirement in the Illinois Electronic Fund Transfer Act for a physical sign disclosing fees on an ATM terminal. The amendatory language in HB 2432 was needed to clarify and ensure credit unions' right to remove the physical sign as a matter of state law, the league said.
 
The Credit Union National Association and state leagues strongly advocated an amendment to the federal Electronic Funds Transfer Act, and in March, the Consumer Financial Protection Bureau implemented a rule to eliminate redundant disclosures (News Now Aug. 2). Earlier this month, New York Gov. Andrew Cuomo signed a similar state law.
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