Banks and other financial institutions that maintain ATMs got good news from Congress to close out the year. On December 11, 2012, the Senate passed H.R. 4367 by unanimous consent, following passage by the House of Representatives in July. The bill now moves to the President’s desk for his signature. H.R. 4367, as passed, amends the Electronic Funds Transfer Act to remove the placard fee disclosure requirement for ATMs operated by a financial institution other than the institution at which a consumer has an account.
Under the Electronic Funds Transfer Act, financial institutions were required to have a prominently displayed placard on each ATM disclosing fees that could be charged to individuals using the ATM. This was in addition to the requirement that any such fees be disclosed on the ATM screen prior to any transaction, allowing the customer to cancel the transaction without incurring any fee. The placard requirement has led to numerous lawsuits, many by serial plaintiffs, who searched for ATMs without the required placards, made a single small withdrawal, and filed suit against the financial institution. Under the Act, violation of the placard requirement resulted in statutory damages of $100 to $1000 per violation, plus costs and attorney’s fees. As a result, the filing of such a suit regularly resulted in a nuisance suit payment of $1000 to the plaintiff.
Financial institutions are still required to disclose all fees on screen prior to an ATM transaction, but the physical placard fee disclosure requirement, and the serial plaintiff lawsuits it spawned, should end once President Obama signs H.R. 4367 into law.
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