WASHINGTON – CUNA has urged the CFPB to suspend a duplicative ATM notice requirement in an effort to help stop lawsuits being brought against credit unions and other financial institutions when the notices have been removed, damaged, or destroyed.
The EFT Act requires credit unions and other financial institutions to disclose on the outside surface of the ATM that fees will or may be charged. More detailed ATM fee information must also be provided before the transaction is completed by either projecting it on the ATM's screen or providing the ATM user with a small printed disclosure.
Credit unions and others have found that the outside notices on ATMs are, in some cases, being intentionally removed or destroyed, without the financial institution's knowledge, and that pictures are then taken of the ATM to show noncompliance. Some ATM users are then using this evidence of apparent non-compliance as grounds for lawsuits.
"Consumers do not benefit from the redundant notices, yet credit unions are being sued because the notices have been removed," CUNA President/CEO Bill Cheney said in a letter to Acting CFPB Director Raj Date.
"If the litigants were concerned about compliance, they should first bring the issue to the institution's attention to correct it or to the attention of the regulator. That is not happening and ATM ‘chasers’ are going straight to court," Cheney added. Cheney urged Date to perform a quick review of this situation and "suspend the duplicative ATM notice requirement."
If a quick suspension of the rule is not possible, the CFPB, "at the very least," should announce it will work with CUNA, credit unions, consumer groups, and others "to seek legislation immediately that will put an end to these suits."
Recommendations on how to mitigate the risk of ATM fee lawsuits are available on the NJCUL Web site here.
Any missing signage should be replaced immediately, and credit unions can ensure that this can be done in a quick fashion by maintaining a supply of signs and stickers to replace any that have been defaced or removed from ATMs, recommends CUNA.
The ATM screen and paper disclosures should also be tested.