Forget the "fiscal cliff."
While U.S. businesses and taxpayers wait for a resolution to the nation's looming double whammy of federal government spending cuts and higher individual tax rates, the House of Representatives has passed a bill that would eliminate certain fee disclosure requirements on ATMs. It now goes to the Senate.
Federal law currently requires banks, credit unions and other ATM operators to give consumers two notices that a fee might or will be charged if they use an ATM. The first notice must be on the machine, the second on the screen or a paper printout.
The bill, H.R. 4367, would end the on-machine notice requirement. The on-screen or on-paper notice, which typically appears only after the consumer has initiated an interaction, would still be required.
Banks have rallied against the on-machine notice requirement, claiming that vandals have intentionally removed, destroyed or damaged the notices and then photographed the machines to demonstrate supposed noncompliance, thereby opening the door to consumer class-action lawsuits. Plaintiffs can recover $500,000, or 1 percent of the ATM operator's net worth, whichever is less.
In a statement, U.S. Rep. Blaine Luetkemeyer, R-Mo., one of the bill's sponsors, described the bill as a "common sense fix that cracks down on the nuisance lawsuits that have been plaguing financial institutions."
Industry representatives also applauded passage of the bill.
James Ballentine, executive vice president of congressional relations at the American Bankers Association in Washington, D.C., said in a statement that the legislation will give consumers full disclosure and protect financial institutions from frivolous lawsuits.
"The dual-disclosure requirement made some sense when it was enacted in the 1990s. However today, ATMs have become common, and consumers are more aware that fees may be charged," Ballentine said.
Dan Berger, executive vice president of government affairs for the National Association of Federal Credit Unions, also in Washington, D.C., said the legislation was "a win for everyone."
Consumers typically can avoid ATM fees by using only their own bank's ATMs or being a customer of a bank that reimburses other bank's ATM fees.
Do you worry about ATM fees? Have yours risen in the past year?
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