ATM Fee Notice Changes
by Amy Kleinschmit, Director of Compliance
President Obama signed bill H.R. 4367 into law on December 20, 2012. This eliminated the ATM fee sign requirement on the outside of an ATM under the Electronic Fund Transfer Act – the sticker on the outside of your ATM that said something to the effect that “A fee will/may be imposed for providing electronic fund transfer services or for a balance inquiry.” Specifically, 15 U.S.C. 1693b(d)(3)(B)(i) “On the machine The notice required under clause (i) of subparagraph (A) with respect to any fee described in such subparagraph shall be posted in a prominent and conspicuous location on or at the automated teller machine at which the electronic fund transfer is initiated by the consumer” was removed from the EFT Act.
The EFT Act still requires that any ATM operator who imposes a fee on any consumer to provide notice of the fact that a fee is imposed by such operator for providing the service and the amount of any such fee. This notice “shall appear on the screen of the automated teller machine, or on a paper notice issued from such machine, after the transaction is initiated and before the consumer is irrevocably committed to completing the transaction” 15 U.S.C. 1693(d)(3)(B).
Regulation E implements the EFT Act and its requirements for ATM fee notice and is found under 12 CFR §1005.16. The Consumer Financial Protection Bureau is expected to propose a technical amendment to Regulation E to remove the requirement that notice of a fee be posted “in a prominent and conspicuous location on or at the automated teller machine.” §1005.16(c)(1).
Regulation E §1005.16 also requires that notice regarding the imposition of a fee on a consumer for initiating an electronic fund transfer or a balance inquiry be provided “either by showing it on the screen of the automated teller machine or by providing it on paper, before the consumer is committed to paying a fee.” §1005.16(c)(2) This is was not removed by HR 4367 and is still a requirement.
HR 4367 affected Federal law; however, some states had enacted state requirements relating to ATM fee notice which will not be changed by this bill. In North Dakota, NDCC 8-08-31, Electronic funds transfer fees, provides, “The operator of any electronic funds transfer facility providing for electronic funds transfer in this state may impose a transaction fee for the use of an electronic funds transfer facility if the imposition of the fee is disclosed at the time and in a manner that allows the user to terminate or cancel the transaction without incurring the transaction fee. The fee may be in addition to any other charge imposed by the operator at an electronic funds transfer facility or by any other financial institution. The name of the owner of an automated teller machine must be shown on each automated teller machine located separate from a financial institution.” This would be in line with the remaining notice requirement under Regulation E.
In South Dakota, the statute that did apply to fee notice at ATM, specifically SDCL 51A-8-8, was repealed in 2005 by SL 2005, ch 253, §§ 5 to 7.
Should you have any questions or concerns regarding this or any other compliance topic, please do not hesitate to contact Amy Kleinschmit at akleinschmit@cuad.coop or 701.214.9721.