ATM Fees, Disclosures, and Proprietary ATMs

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Question:

Our Reg E disclosure states that our customers that use our proprietary ATM's and any ATM owned by our affiliateswould not be charged for any transactions. However, we have two ATMs located inside two different businesses. Both establishments are accessible by the public. These two ATMs are cash disbursement only. We have a sign that comes up to inform anyone who uses this machine that there would be a fee of $x.xx. Would we be in violation of our own policy/disclosure to charge a fee to our customers at these two ATMs?

Answer:

Answer by Jim Bedsole:
I believe you would be in violation of your disclosures under Reg E if you charge your bank customers for use ofthese ATMs after disclosing to them they would not be charged for use of proprietary ATMs. The fact that the ATM is located offsite does not change its status as a proprietary ATM.

Answer:

Answer by Lucy Griffin:
I agree with Jim. The proprietary status of the ATM is determined by ownership, not location. So if you charge your own customers a fee to use those ATMs, then that must be reflected in your disclosures. ATM fees is an area of high customer sensitivity. The best practice, when in doubt, is to disclose.

Answer:

Answer by Andy Zavoina:
I can't disagree with Jim or Lucy since they're right.

So what can you do if you value the income from these two ATMs? Redisclose to your customers or transfer ownership to a nonaffiliate and share in the income.

You should already be knowledgeable of the the Reg. E changes mandated by GLB requiring notice at the ATMs (onscreen and at the machine) and in disclosures given by the bank that third party fees may apply. These are insections 904 and 905 of the EFT Act.

First published on BankersOnline.com 7/2/01