A recent wave of lawsuits has been filed this month against credit unions for failing to properly disclose ATM fees, CUNA reports.
The recent lawsuits, filed by New York resident Don Anderson against credit unions and banks in Texas and Louisiana, allege violations of Electronic Funds Transfer Act (Regulation E) disclosure provisions.
When credit unions charge a fee to a consumer using a non-credit union ATM network card or debit card, Section 205.16 of this act requires:
Section 205.9 of Reg E also requires the amount of the fee to appear on the receipt. A violation could result in a fine of up to $500,000 plus costs and attorney fees based on a class action filing.
The lawsuits typically involve missing signage on or at the ATM and/or incorrect fees disclosed on the sign at the ATM. Plus, many of these lawsuits involve remote ATMs serviced by third-party vendors.
Credit unions may also avoid these lawsuits by not placing the precise fee amount on the sign itself, because the regulation doesn’t require doing so.
Last summer, CUNA Mutual Group released alerts addressing earlier waves of similar lawsuits. CUNA and CUNA Mutual are working diligently with legislators and regulatory agencies to facilitate legislative changes to Reg E’s requirement that signs be placed on or at every ATM.
This is a redundancy because the consumer also receives the notice on the ATM screen before completing the transaction.
CUNA and CUNA Mutual have asked the Consumer Financial Protection Bureau to address this situation, but there are no guarantees of legislative or regulatory relief at this point.
In the meantime, CUNA and CUNA Mutual urge credit unions to implement these risk-mitigation strategies:
To ensure ATMs meet Regulation E’s signage requirements, credit unions should:
Return the sign to its permanent location once remodeling is complete.