H.R. 4367: To amend the Electronic Fund Transfer Act to limit the fee disclosure requirement for an automatic teller machine to the screen of that machine

H.R. 4367

To amend the Electronic Fund Transfer Act to limit the fee disclosure requirement for an automatic teller machine to the screen of that machine

Date
July 9, 2012 (112th Congress, 2nd Session)

Staff Contact
Communications

Floor Situation

On Monday, July 9, 2012, the House is scheduled to consider H.R. 4367, a bill to amend the Electronic Fund Transfer Act to limit the fee disclosure requirement for an automatic teller machine to the screen of that machine, under a suspension of the rules requiring a two-thirds majority vote for approval.  The bill was introduced on April 17, 2012, by Rep. Blaine Luetkemeyer (R-MO) and referred to the Committee on Financial Services.  The committee held a mark-up session on June 27, 2012, and ordered the bill to be reported by voice vote.

Bill Summary

H.R. 4367 would amend the Consumer Credit Protection Act—commonly known as the Electronic Fund Transfer Act (EFTA)—by eliminating the requirement that fee notices be affixed to, or displayed on, automated teller machines (ATMs).

Background

The following is from the Financial Services Committee Report, H. Rept. 112-576:

“The EFTA and its implementing rule, Regulation E, require ATM operators to display notices in two separate places notifying consumers that they might be charged fees for withdrawing cash from the ATM.  The EFTA and Regulation E require that one of these notices must be posted in a prominent and conspicuous location on or at the ATM.  The second notice must appear on the screen of the ATM, or on a paper notice issued from the machine, after the transaction is initiated and before the consumer is irrevocably committed to completing the transaction.

“When the provision requiring physical ATM fee disclosures was enacted in 1999, consumers were less familiar with ATM technology.  Some consumers may not have known that they might have to pay for using certain ATMs. Because ATM screens were smaller and had lower resolutions in 1999, Congress required ATM operators to display fee notices to consumers both on the ATM screen and in a prominent location on the machine itself.  Today, ATMs are more prominent and better understood, screens are much larger, and they display sharper images. Also, unlike before, when many ATMs were not capable of providing the notice on the monitor, every ATM can notify consumers of possible fees today.

“But even though the EFTA's physical disclosure requirement has become obsolete, the requirement exposes banks, credit unions and retailers to frivolous lawsuits and unnecessary costs.  Under the EFTA, a consumer who uses an ATM that does not have a fee notice physically attached may recover statutory damages of between $100 and $1,000 for each transaction.  The law also permits class action lawsuits to recover up to half a million dollars.”

Cost

According to the cost estimate by the Congressional Budget Office (CBO), “The bill would require the Consumer Financial Protection Bureau (CFPB) and the Federal Reserve Board to revise certain disclosure regulations. Changes in the CFPB's workload are reflected as increases or decreases in its mandatory appropriations, while changes in the workload of the Federal Reserve Board are reflected in the budget as changes in revenues. Based on information from those agencies, CBO estimates that revising those regulations would not have a significant effect on their workload and any change in direct spending (for the CFPB) or revenues (for the Federal Reserve Board) would be insignificant.  Implementing H.R. 4367 would not affect spending subject to appropriation.”