I

104TH CONGRESS

2D SESSION H. R. 3727

To amend the Electronic Fund Transfer Act to require notice of certain

fees imposed by the operator of an automated teller machine in connection with an electronic fund transfer initiated by a consumer at the

machine, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 26, 1996

Mrs. ROUKEMA (for herself and Mr. SCHUMER) introduced the following bill;

which was referred to the Committee on Banking and Financial Services

A BILL

To amend the Electronic Fund Transfer Act to require notice

of certain fees imposed by the operator of an automated

teller machine in connection with an electronic fund

transfer initiated by a consumer at the machine, and

for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘ATM Fee Reform Act

5 of 1996’’.
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1 SEC. 2. ELECTRONIC FUND TRANSFER FEE DISCLOSURES

2 AT ANY HOST ATM.

3 Section 904 of the Electronic Fund Transfer Act (15

4 U.S.C. 1693b) is amended—

5 (1) by striking ‘‘(d) In the event’’ and inserting

6 ‘‘(d) APPLICABILITY TO SERVICE PROVIDERS

7 OTHER THAN CERTAIN FINANCIAL INSTITU8 TIONS.—

9 ‘‘(1) IN GENERAL.—In the event’’; and

10 (2) by adding at the end the following new

11 paragraph:

12 ‘‘(2) FEE DISCLOSURES AT ELECTRONIC TERMI13 NALS.—

14 ‘‘(A) IN GENERAL.—The regulations pre15 scribed under paragraph (1) shall require any

16 host electronic terminal operator who imposes a

17 fee on any consumer for providing host transfer

18 services to such consumer to provide notice in

19 accordance with subparagraph (B) to the

20 consumer (at the time the service is provided)

21 of—

22 ‘‘(i) the fact that a fee is imposed by

23 such operator for providing the service;

24 and

25 ‘‘(ii) the amount of any such fee.
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1 ‘‘(B) NOTICE REQUIREMENTS.—The notice

2 required under subparagraph (A) with respect

3 to any fee described in such subparagraph

4 shall—

5 ‘‘(i) be posted in a prominent and

6 conspicuous location on or at the electronic

7 terminal at which the electronic fund

8 transfer is initiated by the consumer; and

9 ‘‘(ii) appear on the screen of the elec10 tronic terminal, or on a paper notice issued

11 from the terminal, after the transaction is

12 initiated and before the consumer is irrev13 ocably committed to completing the trans14 action.

15 ‘‘(C) PROHIBITION ON FEES NOT PROP16 ERLY DISCLOSED AND EXPLICITLY ASSUMED BY

17 CONSUMER.—No fee may be imposed by any

18 host electronic terminal operator in connection

19 with any electronic fund transfer initiated by a

20 consumer for which a notice is required under

21 subparagraph (A), unless—

22 ‘‘(i) the consumer receives such notice

23 in accordance with subparagraph (B); and
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1 ‘‘(ii) the consumer elects to continue

2 in the manner necessary to effect the

3 transaction after receiving such notice.

4 ‘‘(D) DEFINITIONS.—For purposes of this

5 paragraph, the following definitions shall apply:

6 ‘‘(i) ELECTRONIC FUND TRANSFER.—

7 The term ‘electronic fund transfer’ in8 cludes a transaction which involves a bal9 ance inquiry initiated by a consumer in the

10 same manner as an electronic fund trans11 fer, whether or not the consumer initiates

12 a transfer of funds in the course of the

13 transaction.

14 ‘‘(ii) HOST ELECTRONIC TERMINAL

15 OPERATOR.—The term ‘host electronic ter16 minal operator’ means any person who—

17 ‘‘(I) operates an electronic termi18 nal at which consumers initiate elec19 tronic fund transfers; and

20 ‘‘(II) is not the financial institu21 tion which holds the account of any

22 such consumer from which the trans23 fer is made.

24 ‘‘(iii) HOST TRANSFER SERVICES.—

25 The term ‘host transfer services’ means
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1 any electronic fund transfer made by a

2 host electronic terminal operator in connec3 tion with a transaction initiated by a

4 consumer at an electronic terminal oper5 ated by such operator.’’.

6 SEC. 3. AGENCY REPORTS OF COMPLIANCE WITH REGULA7 TION E.

8 (a) IN GENERAL.—Section 918 of the Electronic

9 Fund Transfer Act (15 U.S.C. 1693p) is amended by add10 ing at the end the following new subsection:

11 ‘‘(c) COMPLIANCE AND TRENDS.—

12 ‘‘(1) REGULATION E COMPLIANCE REPORTS.—

13 Each agency responsible under section 917 for en14 forcing compliance with the requirements imposed

15 under this title shall submit an annual report to the

16 Congress on the degree to which entities which are

17 subject to the jurisdiction of such agency under this

18 title are in compliance with regulations prescribed by

19 the Board under section 904(d).

20 ‘‘(2) TRENDS IN FEES IMPOSED BY HOST ATM

21 OPERATORS.—Each report submitted by an agency

22 pursuant to paragraph (1) shall include a descrip23 tion of any discernible trend, in the Nation as a

24 whole and in each region—
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1 ‘‘(A) in the imposition of fees for which no2 tices are required under section 904(d)(2); and

3 ‘‘(B) in the rate of compliance with regula4 tions prescribed pursuant to such section.

5 ‘‘(3) SEPARATE SUBMISSION NOT REQUIRED.—

6 The information required to be submitted to the

7 Congress under this subsection may be included in

8 any other annual report submitted to the Congress

9 by such agency.’’.

10 SEC. 4. DISCLOSURE OF POSSIBLE FEES TO CONSUMERS

11 WHEN ATM CARD IS ISSUED.

12 Section 911 of the Electronic Fund Transfer Act (15

13 U.S.C. 1693i) is amended by adding at the end the follow14 ing new subsection:

15 ‘‘(d) DISCLOSURE OF POSSIBLE EFT FEES.—When16 ever a card, code, or other means of access to a consumer’s

17 account is issued for the purpose of initiating electronic

18 fund transfers from such account, the person issuing the

19 card, code, or other means of access shall provide a written

20 notice to the accountholder that a fee may be imposed

21 by—

22 ‘‘(1) a host electronic terminal operator (as de23 fined in section 904(d)(2)(D)(ii)) if the consumer

24 initiates a transfer from an electronic terminal which
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1 is not operated by the person issuing the card or

2 other means of access; and

3 ‘‘(2) any national, regional, or local network

4 utilized to effect the transaction.’’.

5 SEC. 5. FEASIBILITY STUDY.

6 (a) IN GENERAL.—The Comptroller General of the

7 United States shall conduct a study of the feasibility of

8 prohibiting the imposition of any fee by any person in con9 nection with any electronic fund transfer initiated by a

10 consumer through the use of an electronic terminal un11 less—

12 (1) a notice is provided to the consumer before

13 the consumer is irrevocably committed to completing

14 the transaction, which clearly states the amount of

15 any fee which will be imposed upon the consumma16 tion of the transaction by—

17 (A) any host electronic terminal operator

18 (as defined in section 904(d)(2)(D)(ii) of the

19 Electronic Fund Transfer Act) involved in the

20 transaction;

21 (B) the financial institution holding the ac22 count of the consumer;

23 (C) any national, regional, or local network

24 utilized to effect the transaction; and
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1 (D) any other party involved in the trans2 fer; and

3 (2) the consumer elects to consummate the

4 transaction after receiving the notice described in

5 paragraph (1).

6 (b) FACTORS TO BE CONSIDERED.—In conducting

7 the study required under subsection (a) with regard to the

8 notice requirement described in such subsection, the

9 Comptroller General shall consider the following factors:

10 (1) The availability of appropriate technology.

11 (2) Implementation and operating costs.

12 (3) The competitive impact any such notice re13 quirement would have on various sizes and types of

14 institutions, if implemented.

15 (4) The period of time which would be reason16 able for implementing any such notice requirement.

17 (5) The extent to which consumers would bene18 fit from any such notice requirement.

19 (6) Any other factor the Comptroller General

20 determines to be appropriate in analyzing the fea21 sibility of imposing any such notice requirement.

22 (c) REPORT TO THE CONGRESS.—Before the end of

23 the 6-month period beginning on the date of the enact24 ment of this Act, the Comptroller General shall submit

25 a report to the Congress containing—
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1 (1) the findings and conclusions of the Comp2 troller General in connection with the study required

3 under subsection (a); and

4 (2) the recommendation of the Comptroller

5 General with regard to the question of whether a no6 tice requirement described in subsection (a) should

7 be implemented and, if so, how such requirement

8 should be implemented.

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