News

Guam considering changing definition of ATM

January 13, 2004

GUAM-Guam's banking industry and senators are debating a bill that would change the local law's definition of an ATM, according to a KUAM News report.

Guam law defines bank-owned ATMs as a branch of the bank, subject to all of the same regulations, fees and taxes as a bricks-and-mortar bank branch staffed by tellers.

Sen. Larry Kasperbauer's Bill 158 seeks to change that law. "There is no need to my knowledge to regulate the ATMs to the extent that they have to go through all the procedures to be established as you do a branch of the bank," Kasperbauer told KUAM News.

Locally owned banks see it differently. They believe the current law offers them an advantage over their off-island competition. "Our capitol base is significantly far more limited than those of the off-island institutions ... local business on the island need to be afforded to our local businesses," said Bank of Guam vice president Jackie Marati.

She argued that it is logical to consider an ATM a branch of a bank.

"Enormous amounts of activity goes through ATM branches, you know; not only deposits and payments, but you can even get loans and cash advances through ATM machines," she said. "It's a part of the bank, and it's an arm of the bank," she said.

Due to the conflict of opinion within Guam's banking industry, the Guam Banker's Association didn't issue an opinion on Bill 158. However, the association did make clear its opinion on non-bank owned ATMs.

Said Larry Butterfield, president of the GBA, "We think there is a definite need for licensing and regulation of ATMs-of all ATMs that operate here. And the reason for that is to protect against identity theft and other fraudulent transactions that can occur."

Private businesses that want to run an ATM in Guam are not regulated, according to KUAM News. They don't have to pay the $500 application fee or the $500 annual fee per ATM owned. There is no background check of ATM owners, nor is there licensing of non-bank machines. 

Butterfield cited a recent case in the United States where the owners of 50 ATMs used stolen information from their machines to defraud ATM users of more than $3.5 million.