Senate Passes Bill (H.R. 4367) To End ATM Fee Decal Cases

On December 11, 2012, the United States Senate passed H.R. 4367, a bill that aims to put an end to the "viral" EFTA lawsuits that spread across the nation in recent years. If President Obama signs the bill, it will eliminate the current statutory requirement that ATM operators post "on-machine" notices which disclose ATM transaction fees (i.e., a "fee decal"). As amended, the EFTA would require ATM operators to provide just the "on-screen" notices, which require each ATM user to consent to any fees prior to completing any ATM transaction and withdrawing funds, instead of both types of notices.

Representative Blaine Luetkemeyer, one of 145 co-sponsors of H.R. 4367, stated that ending the "fee decal" lawsuits was one of the primary purposes of the bill. When he introduced the bill, which passed the House in a 371-0 vote earlier this year, Luetkemeyer noted that "some individuals have seen the potential to make a quick buck off a frivolous claim and have begun to remove stickers from ATMs across the country, thereby placing financial institutions and merchants out of compliance," and stated that the bill seeks "to eliminate an outdated and unnecessary regulatory burden facing merchants and financial institutions while continuing to ensure consumer protections for all ATM users through required on-screen fee disclosures." 158 Cong. Rec. H4665 (daily ed. July 9, 2012) (statement of Rep. Luetkemeyer).

The near end to the fee decal lawsuits comes at a time when the fee decal cases have begun to make their way to federal Courts of Appeals. The Eighth and Ninth Circuit are set to decide critical EFTA questions in the cases of Charvat v. First National Bank of Wahoo and Johnson v. Cardtronics Inc., respectively. Charvat presents the question of whether a fee decal plaintiff has standing to sue over the alleged lack of physical fee notice. The district court in Charvat held that the plaintiff lacked Article III standing because he had seen the on-screen fee notice, and, therefore, had not suffered an injury in fact. In his appeal, the Charvat plaintiff argues that he should still be permitted to seek statutory damages for the alleged violation.

In Johnson, the Ninth Circuit may provide guidance on important statutory defenses available to ATM operators that have been sued over allegedly missing fee decals. The statutory defenses at issue in Johnson are (1) the safe harbor a/k/a vandalism defense and (2) the bona fide...

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