WASHINGTON (6/28/12)--The House Financial Services Committee unanimously approved legislation that would ease duplicative ATM disclosure regulations on Wednesday, and Credit Union National Association (CUNA) President/CEO Bill Cheney said this committee approval was "a big step toward rectifying a problematic case of regulatory redundancy."
The bill, H.R. 4367, would eliminate portions of Regulation E that require credit unions and other financial institutions that provide ATM services to display a physical notice on the ATM that a fee will be charged. Under the legislation, ATMs would only be required to display the ATM disclosures on a screen, and give ATM users the choice of opting in to such a fee.
CUNA has stressed that existing ATM disclosure requirements are creating issues for credit unions and other financial institutions that continue to be subject to frivolous lawsuits. Outside notices on ATMs are, in some cases, being intentionally removed or destroyed, without the financial institution's knowledge, and pictures are then taken of the ATM to show noncompliance. Some ATM users may then use this as evidence of apparent noncompliance and as grounds for lawsuits, and the number and cost of these lawsuits continues to climb.
Credit unions are spending around $2,000 per ATM machine to comply with the physical ATM notice requirement, and many credit unions that find themselves subject to legal action are settling lawsuits to avoid the cost of litigation. Credit unions that are spending money and resources to comply with these ATM regulatory requirements, and to address trumped up regulatory violations, are less able to serve their members, CUNA has noted.
Cheney thanked the committee for responding positively to CUNA's arguments about the need to fix this problem and spare credit unions from duplicative costs that provide no added benefit to consumers.
"The fact is that on-screen disclosures have eliminated the need for a physical notice on ATM machines. The bill passed by the House Financial Services Committee is a common-sense solution that will alleviate an unnecessary compliance burden and reduce instances of baseless litigation," Cheney added.
The bill was introduced by Reps. Blaine Luetkemeyer (R-Mo.) and David Scott (D-Ga.) in April and has 130 co-sponsors. A House roll call vote on H.R. 4367 could come soon after Congress returns from the planned July 4 district work period, and committee members said that they hoped the bill could be moved on to the Senate quickly.
CUNA Senior Vice President of Legislative Affairs Ryan Donovan said CUNA has already contacted senators and their staff to develop a plan for getting this legislation through the Senate as quickly as possible. "As we have seen over the last few years, getting a bill through the Senate is not always easy, but we are hopeful that the broad support the bill earned in the House as well as the straightforward nature of the legislation will facilitate its consideration and passage in the Senate," he added.
CUNA will continue to press Congress to enact this bill as quickly as possible, Cheney said.