STRATEGIC PARTNERS
February 27, 2002
DES MOINES, Iowa -- Attorney General Tom Miller and state Banking Superintendent Holmes Foster are asking the Supreme Court to uphold Iowa's Electronic Funds Transfer Act.
Iowa's petition was filed Feb. 2 in Washington D.C.
"We are asking the court to uphold Iowa's law that requires universal ATM access without surcharges to all cardholders in the state, no matter who controls the ATM machine a consumer is using," Miller said.
Consumer protection "is a traditional power of the states and should not be preempted," Miller said.
Bank One has challenged Iowa's law, contending that national banks are exempt from the state law because of the National Banking Act. However, Miller argues that the federal Electronic Funds Transfer Act makes national banks subject to Iowa's EFT law.
National banks like Bank One are "merely seeking to tilt the playing field in their favor when it comes to ATMs," Miller said.
The case to date:
In 1997, Bank One installed ATMs in several Sears stores in Iowa. State banking officials ordered Bank One to remove the machines, since the bank had no office, branch or agreement with a financial institution having an office in Iowa, as required by state law.
Bank One removed the ATMs but asked a federal court to block state enforcement of the action on the grounds that the National Banking Act preempted certain provisions of Iowa's EFT law.
Iowa defended its EFT statute on the basis of the anti-preemption provision of the federal EFTA, which says a state law is not inconsistent with the EFTA if the protection the state law affords consumers is greater that protection provided for by the EFTA.
A U.S. District Court judge found no preemption of Iowa's EFT law. But Bank One appealed to the Eighth Circuit where, in a 2-1 decision by a three-judge panel, the court sided with Bank One. In November, the court also rejected Iowa's appeal of that decision.
