Article

Industry urged to speak up on fee placard rule reform

A new streamlined comment site makes input fast and easy, though November elections make swift government action unlikely.

February 23, 2012 by Suzanne Cluckey — Owner, Suzanne Cluckey Communications

The government agency responsible for streamlining federal regulations has now streamlined the mechanism for commenting on them.

On Feb. 16, the Consumer Financial Protection Bureau launched a new, user-friendly website where, with exactly two drop-downs and four spaces for written answers, ATM industry members can explain why Reg E — "the placard rule" — should be abolished. Even the questions are streamlined:

• Describe the specific change you want the CFPB to make to the regulations.
• Explain the reason for your suggestion.
• How would this change affect consumers?
• How would this change affect financial services providers?

The new comment site is a welcome development in a fee placard regulation campaign that EFTA CEO Kurt Helwig calls "probably the top priority for both EFTA and ATMIA at this point from a legislative and regulatory standpoint."

"It was definitely far easier than the one I previously viewed at the Federal Register," said Bryan Bauer, president of Kahuna ATM solutions. "All you do [at the new site] is click to select 'Regulation E' from the first drop-down and then select 'disclosures on automated teller machines' at the next dropdown. And then add some simple 'This is what I would suggest' for the other four fields. That's all it is."

Even the "This is what I would suggest" part will become easier very soon. EFTA and ATMIA are collaborating on a letter that will provide industry members with talking points they can use to construct their responses. "I have the draft letter on my desk right now," said Kurt Helwig, CEO of EFTA. "Next week it will be finalized at a board meeting during the ATMIA conference." After that, Helwig said, the letter would be ready to go to association members — probably sometime the week of March 5. The placard rule comment site will remain open until April 9.

Helwig said ATMIA and EFTA would provide bullet points rather than complete answers to plug into the comment fields because industry members' own words will have the greatest impact on reviewers at the CFPB. "If you just cut and paste the same statments over and over, they'll stop paying attention to you," he said.

Josh Ettesvold, president of Express Teller Services emphasized the importance of generating a large volume of comments. "It's kind of like when we had the whole Harkin Amendment thing a year and a half ago," he said. "When that happened there was enough uproar in the industry and we got the word out real quick."

The CFBP was reluctant to confirm that the number of comments received would influence placement on the priority list of regulations to address, saying that the opinions of smaller consumer groups were also important to their decision-making. In a written statement introducing the streamlined comment site, Bureau director Richard Cordray said, "We want to know what parts of these regulations you think the Bureau should make the highest priority for updating, modifying, or eliminating …" One might infer from that statement that volume matters.

Helwig said it was hard to judge how much comment would come from pro-placard constituencies, but so far, that side had been very quiet. "I haven't seen much in opposition in the press yet. I did see some article that said, 'Now they're even trying to take disclosure away,' but that was only one."

This article, headlined "ATM fee notice under attack," said the problem with eliminating the physical notice was that an unsuspecting consumer might initiate a transaction before finding out that a fee would be assessed. The author said that having begun a transaction, it would be "a reasonable assumption" that the ATM user would pay the fee rather than terminate the process.

Whatever the ATM user elects to do, the fee will have been disclosed. And disclosure was the original intent of the regulation, not dissuasion of consumers from paying for a service offered as a convenience. 

The author concluded that the best solution would be to affix a physical notice in a way that "deters malicious vandalism." The problem for ATM operators being that malicious vandals are not deterred easily — even when a camera is watching.

Helwig offers a case in point: "We have a series of photos where somebody went in to an ATM vestibule and you could see the placard on the side [of the ATM]," he said. "They look up at the camera, they kind of hunch themselves over away from the camera. And in the next shot the placard is gone. Then the next day that person filed a suit."

Helwig believes that the industry is gaining traction with efforts to amend the placard rule. And he said that although commenting on the regulation through the CFPB website was certainly important, the CFBP could not, itself, change the regulation; what was done by legislation would have to be undone by legislation. "We will have to find a sponsor the legislation — and I think we have legislators who would be willing to work with us on that — and then it will have to go through both houses of Congress," he said.

Under the best of circumstances this is not a speedy process. And an election year is not the best of circumstances, Helwig said, noting that Congress "came out and said after they approved the payroll tax cut extension that that would be pretty much it for the year because of the election. For the year … and we're only two months in."

For more on this topic, visit our regulatory issues research center.

About Suzanne Cluckey

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Suzanne’s editorial career has spanned three decades and encompassed all B2B and B2C communications formats. Her award-winning work has appeared in trade and consumer media in the United States and internationally.