WASHINGTON (4/18/12)--Legislation that would ease current ATM fee disclosure regulations "will protect credit unions and other ATM operators from frivolous lawsuits while at the same time maintaining important consumer protections," Credit Union National Association (CUNA) President/CEO Bill Cheney said.
The bill, H.R. 4367, was introduced by Reps. Blaine Luetkemeyer (R-Mo.) and David Scott (D-Ga.) on Tuesday.
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.
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. The physical ATM fee disclosure notice requirement would be eliminated.
Cheney thanked the congressmen for offering the legislation, calling the bill common sense legislation that will reduce regulatory burden without harming ATM users. He said CUNA looks forward to working with them as the bill makes its way through Congress.
ATM disclosure requirements have caused issues for credit unions and other financial institutions. CUNA has noted that 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 recently estimated that the total number of these lawsuits could be in the hundreds.
CUNA this week communicated with the Consumer Financial Protection Bureau on the ATM issue, telling that agency that it 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. (See related April 17 News Now story: CUNA details how CFPB could address ATM issue)
Lawsuits brought against credit unions and banks alleging violations of the ATM-fee disclosure regulations are on the increase again, this time on the West Coast with the latest filed against a credit union in Washington state. (See related News Now story: ATM fee-notice lawsuits spread to West Coast)