Congress Passes ATM Disclosure Bill
Even if it threw salt on the credit union MBL wound, credit unions got a bit of welcome news yesterday when the House passed and sent to the President for his signature H.R. 4367, which eliminates the federal requirements under the Electronic Fund Transfer Act that financial institutions conspicuously place physical ATM fee notices. By doing away with this requirement Congress gave a well deserved kick in the gut to bottom feeding lawyers everywhere, some of whom were developing a specialty in starting class action lawsuits against credit unions that didn’t post this required notice even though existing electronic disclosures during ATM transactions provided more than enough notice to consumers.
My compliance brethren have been quick to point out that New York has its own disclosure requirement. So, if your ATM branch is located in New York, continue to post disclosure signage. However, removing the New York requirement is one of our top legislative priorities and with the federal law about to be amended, this should take much of the wind out of the sails for this type of litigation.
Now for the bad news. The Senate voted to proceed to debate on the merits the Transactional Account Guarantee (TAG) bill pushed by community and independent bankers, which extends total FDIC insurance coverage to non-interest bearing accounts in excess of $250,000. This means that not only has the credit union industry been unable to get this bill tied to MBL legislation, but let’s face it, the bankers demonstrated an impressive amount of political muscle by getting strong bi-partisan support for their top legislative agenda item in the lame-duck session. On the bright side, passage in the House is far from certain and the cynic in me wonders if the success of the Senate vote, in part, reflects a political calculus that Senators could vote yes for the bill knowing that it has little chance of becoming law.