Looks like Christmas might come a few days early for anyone operating an ATM. In a flurry of pre-holiday break activity, the U.S. Senate unanimously approved 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."
The bill now goes to President Obama's desk, where one of three things will happen within the next ten days (not counting Sunday): The president will sign the bill and it will become law; the president will not sign the bill and it will become law after 10 days by default; the president will veto the bill and return it to Congress with his objections.
There is a fourth option, the pocket veto, but it's so unlikely and so complicated, it's not worth getting into. In fact, National ATM Council Executive Director Bruce Renard said he thought the first option — a presidential signature — seemed most likely.
"There is, in my opinion, zero reason for the president to do anything other than sign this legislation, and I feel that given the strong and broad bipartisan support for the bill in Congress — and the fact that the bill makes good common sense — the president will sign the legislation," he said.
ATM Industry Association U.S. Executive Director David Tente seconded Renard's sentiments. "Support for the bill is so overwhelming, I can't imagine that the president would refuse to sign it," he said.
So the prospects for enactment seem very good. Working by the ten-day rule, this would come no later than Dec. 22.
Adventures of an ATM fee notice bill
It seemed for a time that a Reg E rewrite wouldn't make it through the legislative process, not this year, anyway, which would've meant starting over from square one in 2013.
Originally introduced by Rep. Blaine Luetkemeyer, R-Mo., on April 17, H.R. 4367 spent three months in committee before being introduced on the House floor on June 27 and passing unanimously on July 9.
Once forwarded to the Senate, the bill ran into two sticky spots. First, Senator Al Franken, D-Minn., proposed adding language to the Senate version of the bill, S. 3204, that would task the Consumer Financial Protection Bureau with setting standards for an on-screen fee notice to be displayed before an ATM transaction began. Franken later withdrew his proposal.
Then came a second CFPB snag. The universally popular ATM bill was combined with a CFPB privacy bill (thus becoming S. 3394) that was unpopular with Republicans who questioned the constitutionality of the CFPB.
In a largely symbolic gesture, Tea Party Republican Jim DeMint, R-S.C., put an "anonymous" hold on the bill in August, preventing it from coming up for a vote.
Don't tear off those ATM stickers yet
Still, those supporting the legislation continued to believe it would eventually pass. Groups and associations afflicted by Reg E continued to make trips to the Hill to bend the ears of legislators, committee-members and their staffs.
Tente said the feeling was that the bill would move forward after the election, and this confidence turned out to be well placed. In the end, the original House versions of both Reg E and CFPB received Senate approval.
"Senator DeMint's position on the issue softened recently, with Democratic retention of the White House and a Senate majority following last month's elections," said Renard. "[His] impending retirement may have also played a part in his recent willingness to lift his hold on the bill — but this is pure speculation."
The question of why DeMint lifted the hold on S. 3944 matters far less than the question of what happens once the legislation is (presumably) signed into law. For one thing, all those archives of photos of ATMs with fee placards affixed can go into long term storage.
And operators can use the time previously spent on Reg E concerns to do something more productive — although for the next ten days, they might want to step up compliance efforts to avoid "under-the-wire" lawsuits, Tente said.
"Until the bill becomes law, ATM operators will need to remain diligent about complying with all Reg E requirements. I have no doubt that current cases will continue to move forward — and we may even see a few new ones sneak into the courts before the changes become effective."
What's next for ATM deployers? The jury's out.
What of the cases already working their way through the courts? Will they proceed as before, given that they were begun before the regulation changed? Will the courts view the legislation as a backward-reaching acknowledgement that claims in fee placard suits were not legitimate, as long as the operator displayed an on-screen notice?
Renard believes current claims will shake out on a case-by-case basis. "There are certainly plenty of good policy and equity reasons to apply the new law so as to invalidate all the pending law suits. These cases are a waste of both judicial and litigant resources," he said.
"Passage of the new law eliminating the ATM external fee sticker requirement can only help buttress the fact that the pending 'no-ATM sticker' law suits are meritless, on a variety of legal and factual bases, including the lack of any valid public purpose to be served by the type of nuisance 'cookie cutter' litigation involved."
It's encouraging, though not a sure bet. And even with Reg E off the table, other legal hazards remain. (As Tente said, "No doubt [law firms] will find new ways to keep busy.") Class action litigation over ADA compliance issues will be one ongoing concern. Already, quite a number of these suits have found their way onto court dockets.
Lower compensatory awards make ADA claims less attractive to plaintiffs than Reg E cases, but they can still net jaw-dropping profits for representing attorneys. And so it's a certainty that ADA filings will continue.
But for the moment, the industry can sit back and savor the the imminent demise of Reg E with a hearty "Ho, ho, ho!"
For more on this topic, visit the regulatory issues research center.