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CUNA makes ATM disclosure advice available
WASHINGTON (1/3/12)--The Credit Union National Association (CUNA) has alerted credit unions, as well as the Consumer Financial Protection Bureau, of increasing instances of lawsuits being brought against credit unions and other financial institutions when ATM notices have been removed, damaged or destroyed. CUNA's Center for Professional Development (CPD)  also has re-released a spring audio conference on ATM fee disclosures to assist credit unions with issues.

The audio conference features commentary from CUNA Mutual Group Senior Risk Management Specialist Ken Otsuka and PolicyWorks LLC Vice President of Compliance Andrea Stritzke.

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.  More detailed ATM fee information must also be provided before the transaction is completed, either  by  projecting it onto the ATM's screen or providing the ATM user with a small printed disclosure. 

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 using this as evidence of apparent non-compliance and as grounds for lawsuits.

The audio conference addresses:

  • Noncompliance issues giving rise to lawsuits;
  • Best practices credit unions should implement to avoid this type of lawsuit;
  • The requirements of Regulation E; and
  • Answers to implementation questions, such as "What must be included in the disclosure?" and "Where do we put the sign?"
CUNA has also advised credit unions on how to mitigate the risk of ATM fee lawsuits.

In a release sent to credit union league presidents, CUNA said credit unions should develop and maintain written procedures for inspecting all of their ATMs on a regular basis to ensure the ATM fee signs are intact. ATMs should be inspected at least weekly or when the ATM is serviced--whichever provides for more frequent inspections. Credit unions could photograph the ATM each time it is inspected and log the inspections, CUNA added.

Any missing signage should be replaced immediately, and credit unions can ensure that this can be done in a quick fashion by maintaining a supply of signs and stickers to replace any that have been defaced or removed from ATMs, CUNA said.

The ATM screen and paper disclosures should also be tested, CUNA added.

For more on the CPD audio conference and CUNA's efforts to help credit unions avoid these types of suits use the resource links.


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