ATM Fee Disclosure

In November 1999, Congress enacted the Gramm-Leach-Bliley Act (the GLB Act). Title VII of the GLB Act amended the Electronic Funds Transfers Act to add three disclosure requirements. All three have to do with fees imposed for the use of automated teller machines (ATMs) that are operated by someone who does not hold the consumer’s account. In March 2001, the Federal Reserve Board amended Regulation E to implement the statutory requirements. (See the Federal Register for March 6, 2001, beginning at page 13409.)

One of the three requirements is the addition of an item to the list of those that must appear on an initial Regulation E disclosure. [12 CFR 1005.7(b)(11)] We review that and other initial disclosure requirements in the Regulation E chapter in the first part of this manual, the account-opening requirements.

The other two appear in a new Section 16 in Regulation E. [12 CFR 1005.16] Section 16 applies to an “automated teller machine operator” (ATM operator). This is defined as a person who: (1) operates an ATM at which a consumer can initiate an EFT or make a balance inquiry, and (2) does not hold the account related to the EFT or balance inquiry. [12 CFR 1005.16(a)]

Section 16 says that an ATM operator who imposes a fee on consumers for initiating an EFT or making a balance inquiry must do two things:
  1. Post a notice “in a prominent and conspicuous location on or at the automated teller machine….” [12 CFR 1005.16(c)(1)] This notice must say that a fee will be imposed for providing EFT services or a balance inquiry. [12 CFR 1005.16(b)(1)(i)] The word “may” can be substituted for “will” if there are circumstances in which a fee will not be charged. [12 CFR 1005.16(b)(1)(ii)] This notice can refer generally to EFT services, or, if the operator charges the fee for only certain types of EFTs, the notice may specify the EFT services for which the fee will be charged. [Commentary, 12 CFR 1005.16(b)(1)-1] [Note: This requirement was eliminated, effective March 26, 2013. See the Federal Register for March 26, 2013 beginning at page 18221.
  2. Provide the same notice, plus the amount of the fee, on the ATM screen or on paper, before the consumer is committed to paying the fee. [12 CFR 1005.16(b) and (c)]

The ATM operator is not allowed to impose the fee unless the ATM operator meets the notice requirement and the consumer elects to proceed with the EFT or balance inquiry. [12 CFR 1005.16(d)]

A twist: Section 9 (Section 9, not Section 16) of Regulation E requires, among other things, that a financial institution provide a receipt to a consumer who initiates an EFT at an electronic terminal. [12 CFR 1005.9(a)] One item of information that must appear on the receipt is the amount of the EFT. [12 CFR 1005.9(a)(1)] This amount may include the amount of a transfer fee if the amount of the fee appears on the receipt and on or at the electronic terminal. [12 CFR 1005.9(a)(1)] Putting the fee on a paper receipt, however, will not satisfy the Section 16 paper notice option (described above) if the receipt comes at the end of the transaction. This is because Section 16 requires that the paper notice come before the consumer is committed to paying the fee.

[Commentary, 12 CFR 1005.9(a)(1)-2.ii.]