Congress Passes ATM Disclosure Bill

December 12, 2012 at 7:34 am 2 comments

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.


Entry filed under: Compliance, New York State, Political, Regulatory. Tags: , , , .

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2 Comments Add your own

  • 1. Kyle Anderson  |  December 12, 2012 at 2:15 pm

    I don’t mind the signage. I think it’s helpful.

    • 2. Henry Meier  |  December 12, 2012 at 3:47 pm

      Kyle the signage to me is overkill. You show me a member who doesn’t know that ATM transactions may be subject to fees and I’ll show you a member who all the signage in the world will not help. In addition, since the law was being used as a tripwire for litigation it was time to get it changed-Thanks for commenting


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Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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