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CUNA details how CFPB could address ATM issue
WASHINGTON (4/17/12)--The Consumer Financial Protection Bureau has "more than sufficient authority" under the Dodd-Frank Wall Street Reform Act and the Electronic Fund Transfer Act to amend Regulation E and eliminate the requirement for on-machine ATM fee disclosure notices, Bill Cheney, president/CEO of the Credit Union National Association (CUNA), said in a recent letter to the agency.

Regulation E currently requires credit unions and other financial institutions that provide ATM services to display a notice on the ATM that a fee will be charged. 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.

CUNA has noted that 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, and the number and cost of these lawsuits continues to climb. CUNA in the letter estimated that the total number of these lawsuits could be in the hundreds.

CUNA in its letter to CFPB Director Richard Cordray said "Congress has provided the agency with general and specific authority to relieve the burdens of Regulation E for certain service providers, consistent with sufficient consumer protection.

"We believe Congress intended for the agency to use this authority to ensure those institutions that are not abusing consumers may be relieved from certain burdens under the rule—and we believe this congressional intent applies to the regulation of remittances as well as to ATM fee notices," the letter added.

"Moreover, sound public policy supports removal of the on-machine ATM fee notice requirements given that these notices are replicated on-screen and are of questionable utility to ATM users," Cheney wrote.

The letter follows a recent meeting between Cordray and CUNA's Executive Committee and senior staff in which the CFPB director asked for CUNA's analysis of how the CFPB could address the ATM issue. CUNA has also discussed this issue on several occasions with the CFPB director and has written about it in comment letters and other communications to the agency.

CUNA is also pursuing a legislative remedy to this ATM problem, working with other financial advocacy organizations to forestall litigation related to ATM fee disclosure notices.

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