The ATM industry is hopeful of getting relief from one source of its legal troubles as momentum builds to eliminate a law requiring operators to disclose ATM fees on the machines' exteriors via stickers or other signs.
Independent ATM operators are heartened by public comments filed recently with the Consumer Financial Protection Bureau that are running heavily in favor of eliminating the requirement, Bruce Renard, executive director of the National ATM Council Inc., tells PaymentsSource.
The bureau in December invited comments on the proposal to streamline certain regulations it inherited from other federal agencies, which included the question of whether external stickers are still necessary, given the fact that ATM operators are required to disclose fees via ATM screens or paper slips (see site).
But within the past 18 months, several attorneys and plaintiffs coincidentally filed some 500 class-action lawsuits alleging that various ATM deployers’ fee-notification stickers were out of date or illegible, creating "a huge hassle" for the industry, says Renard, whose Jacksonville, Fla.-based trade association has fielded many calls from outraged ATM operators over the situation. Renard is executive director of the National ATM Council.
In May, for example, a federal judge in Detroit gave preliminary approval to a class-action lawsuit claiming AAC Community Credit Union failed to disclose the fees charged to nonmember users of its ATM (see story).
Also last month, U.S. Sen. Michael Johanns, R-Neb., introduced a bipartisan bill that would end the requirement for dual fee disclosures at ATMs and require only the on-screen disclosure (see story). A similar House bill also is pending (see story).
Attorneys hoping to generate fees see an opportunity to "clean up" in an area where ATM-fee stickers largely have become irrelevant, Renard says.
"Today, all consumers receive ample notification through the ATM screens themselves of any fees, and the screens can provide better, more up-to-date fee notifications than stickers did," Renard says.
But a law that went into effect "many years ago" to warn consumers of fees that were not always disclosed upfront is still on the books, creating a legal loophole for enterprising lawyers, he notes.
The problem has mushroomed in recent months, creating a backlog of at least 500 class-action lawsuits and may number in the thousands when pending cases are filed, Renard says.
"Fortunately, the vast majority of comments support eliminating ATM-fee stickers, and we are hopeful this rule, and the lawsuits, will go away," he says.
There is no indication yet when Congress or the bureau might act to eliminate the fee-sticker rule. "We believe the bureau has jurisdiction to rule on this and we are hopeful it could be this year, and soon," Renard says.
The sticker issue is only one element of the ATM industry's recent legal hassle.
A wave of lawsuits filed in Pennsylvania and Ohio earlier this year alleging that certain banks and ATM operators failed to comply with new American Disability Act requirements to make ATMs accessible for visually impaired consumers also is causing anxiety for operators (see story).
The requirement went into effect March 15, and many smaller ATM deployers are still weighing the costs and risks of compliance (see story).
"Independent ATM operators have spent a fortune upgrading machines to comply with the latest ADA rules for the visually impaired, and in some cases where it was impossible to do they had to pull out a machine, depriving more people of access to cash," Renard says.
And looming requirements to upgrade ATMs to comply with EMV chip card standards are casting another shadow for operators (see story).
"If you're trying to buy an ATM machine right now, manufacturers cannot give you one that will be EMV-compatible because the industry has not finalized those standards," Renard says. "So people are holding off, which is putting a damper on providing ATMs at a time when consumers, including those who are relying heavily on cash coming out of the recession, the underbanked or who use ATMs to get electronic benefits need them more than ever."
Though it is "a tough time" for ATM operators, many independent ATM operators are still seeing strong demand for their services, Renard says.
"If we could get clarity on key issues it would help, but eliminating the anachronistic ATM fee-sticker rule would be a good start," he says.
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