NAFCU Letter to House Urging Passage of ATM Legislation

July 9, 2012

The Honorable John Boehner    
U.S. House of Representatives  
Washington, D.C. 20515    

The Honorable Nancy Pelosi
Speaker Minority Leader
U.S. House of Representatives
Washington, D.C. 20515

Re: Support H.R. 4367, a bill to remove the outdated ATM fee placard notice

Dear Speaker Boehner and Minority Leader Pelosi:

I am writing on behalf of the National Association of Federal Credit Unions (NAFCU), the only trade association that exclusively represents the interests of our nation’s federal credit unions, to urge the House to pass H.R. 4367, a bill to modernize the Electronic Funds Transfer Act (EFT) by updating the requirements for fee disclosures on ATMs.  We thank Representatives Blaine Leutkemeyer and David Scott for their leadership in introducing this bipartisan legislation that would eliminate the unnecessary placard fee disclosure requirement, which has encouraged a large and growing number of frivolous lawsuits across the nation.

NAFCU represents more than 800 credit unions that are directly involved in providing convenient, reliable ATM services to millions of Americans.  Over the last 18 months, both the number and cost of lawsuits associated with the EFT placard provision have risen precipitously.  If unchecked, these lawsuits will threaten the economic viability of ATM operators and may result in reduced consumer convenience.

The current provision imposed by the EFT requires ATM operators to provide two separate notices of the imposition of fees for the use of the ATM.  One requires the fee to be disclosed on the ATM screen, which then prompts the customer to indicate whether he or she accepts the fee.  If the customer does not affirmatively accept the fee, the transaction is cancelled and the customer is not charged.  Our members fully support this fee disclosure requirement.

The provision also requires ATM operators to attach a physical placard to the ATM stating that a fee may be charged.  If the placard is not attached, the relevant statute prescribes that in a successful class action lawsuit, plaintiffs are entitled to recover “the lesser of $500,000 or 1 per centum of the net worth of the [ATM operator],” plus attorneys’ fees and costs.  This statutorily prescribed bounty has created a strong incentive for spurious lawsuits.  It has led to situations where the placard notice affixed to the ATM has been removed and before the ATM operator is aware of the missing placard, litigants have photographed the ATM without the placard notice and filed suit.

A physical placard fee notice may have played a useful role when Congress first enacted the statutory provision in the 1990’s.  At that time, some consumers might have been unaware that they may be charged a fee for using an ATM.  Also, many ATMs were not capable of providing the notice on the monitor.  Today, many consumers expect to pay a fee at an ATM unless they are using an ATM owned or operated by the credit union where they have their account or their credit union has a reciprocal network agreement for use of the ATM (as many credit unions do with each other, stemming from their cooperative nature).

Accordingly, on behalf of our members and the hundreds-of-millions of ATM users, we respectfully urge the House to pass this bill, as it would eliminate the unnecessary placard notice required by the EFT.  The repeal of the outdated signage provision will stop the flood of frivolous litigation and cause no harm to consumers.  Without relief, the number of baseless lawsuits will continue to rise as will the cost of this service to consumers.  Such actions could very well reduce the number of ATMs deployed and result in reduced consumer convenience.

Again, we urge you to support this important legislation.  Thank you for your consideration and should you have any questions or require additional information, please contact me or Brad Thaler, NAFCU’s Vice President of Legislative Affairs, at 703-842-2204 or


Fred R. Becker, Jr.
President and CEO

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