STRATEGIC PARTNERS
February 27, 2002
SACRAMENTO, Calif. -- California Attorney General Bill Lockyer has thrown his hat into that state's battle over the ATM surcharge.
Lockyer filed a "friend of the court" brief asking a federal court of appeals to uphold the ability of the state to protect consumers by regulating ATM fees.
"California has a vital interest in ensuring that states can protect consumers when it comes to banking actions," Lockyer said. "In enacting federal banking laws, Congress has allowed states to have a role in protecting consumers, which cannot and should not be taken away by bureaucrats at the Office of the Comptroller of the Currency."
In the brief submitted to the Ninth Circuit Court of Appeals in San Francisco, Lockyer argues that local ordinances in San Francisco and Santa Monica are not preempted by federal law and extend important consumer protections that are within state police powers.
Lockyer contends that the Electronic Funds Transfer Act "authorizes and does not preempt the Santa Monica and San Francisco ordinances." Lockyer adds that California's fee restrictions do not impose an undue burden on banks' performance and are not precluded by the National Banking Act.
"Whether bank ATM fees should be limited is a policy issue to be decided by local and state policymakers," Lockyer said. "In this case, we want to protect the ability of California to look after consumers by regulating banking activities."
Lockyer was joined in his "friend of the court" brief by attorneys general in Connecticut, Iowa, Minnesota, New York, Oregon, West Virginia, the Commonwealth of the Northern Mariana Islands and Virgin Islands.
Leland Chan, associate general counsel of the California Bankers Association, said the arguments raised in Lockyer's brief have already been addressed and repudiated both in the preliminary injunction phase of the California case and in related cases in Iowa and Connecticut.
"States stand in the same position as cities as to the preemptive effect of the National Banking Act and OCC regulations, and their participation in this case does not add credence to these failed arguments," Chan said.
