Compliance Blog

Written by Steve Van Beek

Yesterday, Representatives Blaine Luetkemeyer (R-MO) and David Scott (D-GA) introduced a bill, H.R. 4367, that would eliminate the requirement to include the ATM fee disclosure notice on the ATM itself (the on-screen notice would still be required).  

This would remove compliance and legal headaches from financial institutions who are continuously checking, photographing and documenting their ATMs to have defenses against the cottage industry of individuals suing ATM owners alleging inadequate notice.   

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Existing Disclosure Requirements.  While the bill being introduced is a good first step, the unnecessarily confusing regulatory requirements remain in place.  In other words, the legal and compliance risks for credit unions do not change until this bill is passed (if it is passed).  

NAFCU Resources.  In the meantime, below are some NAFCU Compliance resources on the Regulation E ATM Fee Disclosure issue:

• ATM Fee Disclosures - September 2011 NAFCU Compliance Monitor Article (made available to everyone).  Note: The article references the prior 12 CFR 205 rather than 12 CFR 1005.  Update: The ATM Fee Disclosure article with the CFPB citations is available here.   
• NAFCU Comment Letter to the CFPB on Regulatory Streamlining - March 2, 2012 (see page 6-7 for ATM Fee Disclosure discussion).
• Joint Letter to the Hill - February 8th, 2012.  Summary in NAFCU Today.
• January 11, 2011 Blog Post - with a link to That Credit Union Blog on defending against class actions.
• April 26, 2011 Blog Post - with a link to Bankersonline.com on defenses against torn-down disclosures.
• April 27, 2011 Blog Post - looking at the unnecessarily confusing and complex disclosure requirement in Regulation E which is part of the problem.  

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Regulatory Burden.  Think about the unnecessary burden this way:  The current legal and regulatory environment has financial institutions and ATM operators taking time away from serving their customers/members to go out and photograph their ATMs in order to provide defenses against class action lawsuits.  

CFPB.  If the CFPB wants to protect consumers and ensure financial institutions are working to help consumers, they need to get on their soapbox and talk to Congress about removing this unnecessary burden.  Additionally, they should take a good, hard look at their regulatory authority under the Electronic Funds Transfer Act and determine if they can remove this ridiculous requirement and get institutions back to providing services to their members rather than taking photos of their ATMs.