Brief Urges Appeals Court to Uphold ATM Signage Decision

'One size fits all' solution doesn't address realities of diverse ATM usage

December 5, 2012

Contact: Patrick Keefe
CUNA Communications, 202-508-6765

CUNA is urging a federal appeals court to uphold a lower court decision spelling out how credit unions and ATM vendors qualify for immunity from liability for missing "fee decals," which have been the target of a number of recent lawsuits brought against the credit unions and vendors.

The lawsuits are proceeding, even though the decals are obsolete since interactive notices also now appear on ATM screens.

In the "friend of the court" brief filed in the U.S. Court of Appeals for the ninth circuit, CUNA argues that the court should hold 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 states 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, CUNA adds, recognizes that ATMs are remote, unmanned, and often beyond any practicable means of surveillance.

Further, CUNA argues 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."

CUNA states that doing so recognizes 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 notes that under this approach, smaller institutions, with their limited staff, would not be held to an unreasonably high standard concerning the monitoring of their machines.

"This is consistent with the intent of the EFTA and Regulation E and balances consumer protection with the realities of the ATM industry," CUNA wrote.

You can download CUNA's brief by clicking here.

"Our filing in this case is of critical interest to credit unions facing numerous lawsuits over ATM signage," said CUNA 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."

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