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ATM disclosure changes needed says CUNA joint letter
WASHINGTON (2/10/12)--The Credit Union National Association (CUNA) has joined with the Electronic Funds Transfer Association (EFTA) and other groups to urge members of the U.S. Congress to eliminate an unneeded ATM fee disclosure requirement "that has encouraged a large and growing number of frivolous lawsuits across the nation."

The Electronic Fund Transfer Act requires credit unions and other financial institutions to display at each ATM location that fees will or may be charged. The act also requires that more detailed ATM fee information must also be provided before the transaction is completed, either by showing it on the ATM's screen or providing the ATM user with a small printed disclosure before the consumer is committed to paying the fee.

Credit unions and others have found that the 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.

In a joint letter to Congress, CUNA and other banking and trade groups said that both the number and cost of these lawsuits have risen precipitously over the past 18 months. Without some regulatory changes, "the number of these baseless lawsuits will continue to rise as will the cost of this service to consumers," and the number of ATMs that are made available to consumers could ultimately decrease, the letter warned.

The letter added that while this dual disclosure ATM regulation may have been useful when it was first released, technological improvements have meant that the size of the ATM screen-based fee disclosures has grown, eliminating the need for a second disclosure on the body of the ATM.

Additionally, most 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 letter said.

The American Bankers Association, American Gaming Association, ATM Industry Association, Independent Community Bankers Association, and the National Association of Convenience Stores also cosigned the letter.

CUNA continues to believe that the Consumer Financial Protection Bureau has authority under the act and Regulation E to eliminate the requirement for notices on the outside of the ATM. CUNA discussed this with the CFPB earlier this week and the CFPB is considering its authority regarding this issue. However, given the need to resolve ATM notice issues, Congress should look into this as well, CUNA Deputy General Counsel Mary Dunn said.

For the full letter, use the resource link.


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