WASHINGTON - U.S. Sen. Mike Johanns (R-NE) has introduced legislation (S. 3204) that would eliminate the dual fee notification requirement at an ATM. A similar measure has already been introduced in the U.S. House of Representatives (H.R. 4367).

The legislation would amend the Electronic Funds Transfer Act (EFTA) by changing the requirements for fee disclosures on ATMs. Under current law all ATM operators are required to display both a physical placard and provide an electronic disclosure of a fee that an ATM user may incur. Some individuals have found it advantageous to remove the physical placard and sue (or threaten to sue) financial institutions and merchants for noncompliance of the requirement. This is despite the fact that the electronic disclosure goes above and beyond the physical disclosure in that it not only informs the user there is a fee, but what that fee is, and then requires the user to affirmatively accept the fee.

The Consumer Financial Protection Bureau (CFPB), which has jurisdiction over Regulation E and the EFTA, has also expressed interest in eliminating the duplicative fee disclosure requirement. In December 2011, the CFPB asked the public to comment on the elimination of the requirement. However, when it requested comments, the CFPB admitted that it may not be able to eliminate the duplicative fee disclosure requirement until Congress passes legislation eliminating the requirement because the underlying statute requires both (1) a physical placard on the ATM stating that a fee might be imposed at that machine and (2) a notice on the ATM video monitor that discloses the amount of the fee (if any) and provides an opportunity to cancel the transaction once the amount is disclosed.

The legislation would eliminate the requirement for a physical placard but would leave the video monitor disclosure requirement intact. It also eliminates an outdated and unnecessary regulatory burden on all financial institutions while continuing to ensure consumer protections for all ATM users through mandated on-screen fee disclosures.