The Consumer Financial Protection Bureau (“CFPB”) has issued a final rule amending Regulation E (Electronic Fund Transfers), which implements the Electronic Fund Transfer Act (“EFTA”) to eliminate a requirement that a fee notice be posted on or at automated teller machines (“ATMs”). The March 20 amendment to Regulation E implements 2012 legislation which amended the EFTA to eliminate the ATM fee sticker requirement, and left in place the requirement that a specific fee disclosure must appear on the screen of the ATM or on paper issued from the ATM. ATM operators, including banks, will now only have to provide the on-screen or paper disclosure, which must include the amount of the fee to be charged and be provided before the consumer is committed to the transaction. In addition to the deletion of the rule requiring the “on or at” machine disclosure, the final rule also deletes Official Comment 16(b)(1)-1, which provided guidance on the meaning of certain terms related to the fee sticker requirement. The final rule deleting the ATM fee sticker requirement became effective on March 26.
Nutter Notes: In 1999, Congress amended the EFTA to require certain ATM fee disclosures both to be posted on or at the ATM and to be provided on the screen or on a paper notice issued from the ATM. The EFTA requires that the on-screen notice include the specific amount of the fee the consumer would be charged by the ATM operator, but the notice posted “on or at” the machine only had to disclose “the fact that a fee is imposed by such operator for providing the service.” The EFTA prohibited ATM operators from charging a fee if both disclosures were not made. The “on or at” notice typically involved a sticker placed on the machine by the ATM operator. The EFTA allowed ATM operators 5 years to implement the technology needed to make the on-screen disclosures, but did not provide that once the 5 years elapsed operators could cease providing the separate notice “on or at” the machine. Under the EFTA, an ATM operator could be liable for actual damages, statutory damages in individual or class actions, and costs and attorney’s fees for failure to provide both required disclosures. In adopting the final rule, the CFPB acknowledged longstanding concerns that the “on or at” notice requirement provides little or no benefit to consumers and at the same time has been the subject of costly litigation in cases where the notice was not properly posted or was improperly removed.