The U.S. House of Representatives has passed a bill that would eliminate an ATM fee disclosure requirement.
Currently, the federal Electronic Fund Transfer Act requires banks, credit unions and others that operate ATMs to provide two notices that a fee might or will be charged. The first notice must be on the machine, the second on the screen or a paper printout.
Failure to provide both notices opens the door to consumer class-action lawsuits.
Industry groups have charged that plaintiffs in these lawsuits intentionally removed, destroyed or damaged the notices, then photographed the machines to demonstrate supposed noncompliance. The temptation is high since, according to the Independent Community Bankers of America, or ICBA, plaintiffs can recover $500,000 or 1 percent of the ATM operator's net worth, whichever is less.
The bill, H.R. 4367, would end the on-machine notice requirement. The on-screen or on-paper notice would still be required. However, that notice typically appears only after the consumer has initiated some sort of interaction with the machine.
Industry groups applauded the House's passage of the bill.
ICBA CEO Cam Fine said in a statement that the notice requirement "has led to baseless and frivolous lawsuits that threaten the viability of ATM operators." The group is a major supporter of the legislation.
Bill Cheney, CEO of the Credit Union National Association, said in a statement that credit unions "appreciate" passage of the bill, which "eliminates a frustrating regulatory burden."
"House passage of this legislation is an important milestone," Cheney said, "but the work is not done. We urge the Senate to take up this measure as soon as possible and provide credit unions with much-needed regulatory relief."
Fee notices are all the more important for consumers because fees to use an out-of-network ATM rose to new highs for the seventh consecutive year in 2011, according to Bankrate's 2011 Checking Account Survey, which tracks bank checking account fees.
The survey found that the average fee banks changed noncustomers for an ATM transaction last year was up 3 percent to $2.40 compared with $2.33 in the prior year.
Consumers generally can avoid ATM fees by using their own bank's ATMs.
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