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ATMs, electronic benefits ... and the long arm of the law

State legislatures are imposing increasingly restrictive rules on welfare recipients — and are expecting ATM operators to police them.

State legislatures are imposing increasingly restrictive rules on welfare recipients — and are expecting ATM operators to police them.

July 23, 2015

by David Tente, ATM Industry Association Executive Director, US chapter

Keeping up with ever-changing legislative activity is challenging — even for the largest of ATM deployers. Whether you are operating five ATMs or 500, there is a certain level of work required in order to avoid being caught by surprise when new rules are implemented at the state level. Every additional state included in your organization's footprint makes that challenge all the more formidable.

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To help deployers better manage their compliance requirements for the ATM channel, the ATM Industry Association implemented a free state-level compliance service in 2013 for U.S. members and greatly expanded this service in January 2015. ATMIA members now have access to legislative monitoring for all 50 states, the District of Columbia and Puerto Rico, in addition to the original compliance profile and monitoring services.

Compliance monitoring offers an inside look at proposed legislation and its potential impact on ATM deployers and operators. It provides an opportunity to get prepared for rules that have not yet been implemented. And, for those who have an interest in doing so, it offers an opportunity to oppose specific pieces of legislation.

View state-by-state compliance information — use your ATMIA username and password to log in. To receive compliance alerts, email ATMIA@stateside.com.

Restrictions on the rise

So far this year, eight states have passed new laws that affect ATM operators, and 67 more currently are in play. A majority of these relate to administration of programs that oversee electronic benefits transfer and Temporary Assistance for Needy Families.

A significant percentage of the bills being considered would become effective immediately upon passage, which means that ATM operators might be in violation at some point without even knowing it.

The current volume of legislation is not particularly surprising. What is surprising is the level of micromanagement that is beginning to emerge from some of these proposed bills.

As an example, a bill recently that recently became law in Kansas (H.B. 2258) includes a provision limiting TANF recipients to one ATM cash withdrawal of $25 or less per day. Of course, most ATMs dispense only $20 bills, so benefits recipients are effectively limited to $20 per day.

Backlash to this bill — at both the state and federal level — was so immediate and powerful that another bill (H.B. 2281) was hastily passed, giving the state regulator authority to make adjustments in the ATM withdrawal limit. From what we can determine, though, no adjustments have been made yet.

In Colorado, H.B. 1255 retail operators to "take measures to prevent clients from using EBT cards at ATMs in their establishments," if they sell products or services (including liquor, tobacco, adult entertainment and more) that recipients are not allowed to purchase with EBT benefits. Shifting responsibility from the recipient to the ATM operator is a very troublesome development.

Recent trends seem to foretell increasing attempts by legislators to micromanage the behavior of benefit recipients — and increasing demands on ATM operators and merchants to enforce the laws they pass.

The ATMIA US Legal Defense Fund

In addition to keeping our members prepared and informed, it is also important for ATMIA to be directly involved as a positive influence in efforts regulate our industry.

The provision of state and federal monitoring services currently consumes nearly all of the annual contributions to the ATMIA U.S. Legal Defense Fund; we are asking that all ATMIA member organizations that benefit from those monitoring services — either directly or indirectly through your processor or sponsor bank — to contribute at least $250 to the ATMIA U.S. Legal Defense Fund.

All supporters, no matter how small their contribution, are acknowledged on the defense fund banner at our annual conference and through e-mails to the membership at various times during the year. Please help us to reach our 2015 contribution goals and avoid depleting our reserves.

Legislative monitoring is a very labor-intensive and costly service. Despite the high cost, ATMIA is committed to providing these valuable and time saving services to our members — but we can't do it alone.

photo istock

Included In This Story

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ATM Industry Association (ATMIA)

The ATM Industry Association, founded in 1997, is a global non-profit trade association with over 10,500 members in 65 countries. The membership base covers the full range of this worldwide industry comprising over 2.2 million installed ATMs.

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