ELECTRONIC FUND TRANSFER ACT AMENDMENT
(House of Representatives - July 09, 2012)

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[Pages H4664-H4666]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 ELECTRONIC FUND TRANSFER ACT AMENDMENT

  Mr. LUETKEMEYER. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 4367) to amend the Electronic Fund Transfer Act to limit 
the fee disclosure requirement for an automatic teller machine to the 
screen of that machine.
  The Clerk read the title of the bill.

[[Page H4665]]

  The text of the bill is as follows:

                               H.R. 4367

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

     SECTION 1. FEE DISCLOSURE REQUIREMENT.

       Section 904(d)(3)(B) of the Consumer Credit Protection Act 
     (15 U.S.C. 1693b(d)(3)(B)) (commonly known as the 
     ``Electronic Fund Transfer Act'') is amended--
       (1) by striking ``requirements.'' and all that follows 
     through ``The notice required under clauses (i) and (ii)'' 
     and inserting ``requirement.--The notice required under 
     clauses (i) and (ii)'' after ``Notice''; and
       (2) by striking ``, except that during the period 
     beginning'' and all that follows and inserting a period.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Missouri (Mr. Luetkemeyer) and the gentleman from Georgia (Mr. David 
Scott) each will control 20 minutes.
  The Chair recognizes the gentleman from Missouri.


                             General Leave

  Mr. LUETKEMEYER. Mr. Speaker, I ask unanimous consent that all 
Members have 5 legislative days in which to revise and extend their 
remarks and to add extraneous material to this bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Missouri?
  There was no objection.
  Mr. LUETKEMEYER. Mr. Speaker, I yield myself such time as I may 
consume.
  Today, we are considering one of the most commonsense bills seen in 
some time. This bill provides a real solution to a real problem that is 
impacting banks, credit unions, and merchants nationwide.
  Regulation E currently mandates that ATM fee disclosures appear both 
in physical placard or in sticker form on the machines as well as 
through an on-screen electronic notification. Unfortunately, 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. This is exactly what has happened to some small financial 
institutions in my district and throughout Missouri. Someone was 
traveling through the State, removing stickers from ATM machines, and 
then was offering to settle with the banks for several thousands of 
dollars per machine or the banks would face lawsuits.
  The premise of this bill is simple: 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.
  It is important to recognize that the Consumer Financial Protection 
Bureau has also expressed interest in eliminating this duplicative fee 
disclosure requirement. In December of 2011, the CFPB asked the public 
to comment on the elimination of this requirement. However, during the 
public comment period, the CFPB admitted that it may not be able to 
remove the duplicative disclosure requirement and that it would be up 
to Congress to take action.
  Today, Mr. Speaker, it is time for us to take action.
  H.R. 4367 is supported by the National Association of Federal Credit 
Unions, the Credit Union National Association, the American Bankers 
Association, the Independent Community Bankers of America, the United 
States Chamber of Commerce, the Electronic Funds Transfer Association, 
the Consumer Bankers Association, The Clearing House, the Food 
Marketing Institute, the Financial Services Roundtable, the National 
Association of Convenience Stores, the American Gaming Association, and 
the ATM Industry Association as well.
  This legislation has broad bipartisan support from its 145 
cosponsors. Among them is the gentleman from Georgia (Mr. Scott), who 
has been a great partner on this initiative, and I thank him for his 
efforts.
  Again, I want to remind my colleagues that this bill does not in any 
way alter the mandate for on-screen fee disclosures, meaning that 
customers will have a clear understanding of what they will be charged 
before they complete their ATM transactions.
  It is time to put an end to these frivolous lawsuits. I thank my 
colleagues for the sponsorship of this legislation, and I ask all 
Members to support this bill today.
  With that, Mr. Speaker, I reserve the balance of my time.
  Mr. DAVID SCOTT of Georgia. Mr. Speaker, I yield myself such time as 
I may consume.
  First of all, let me say that this is very much bipartisan 
legislation in that it has been sponsored by both Democrats and 
Republicans. I am very, very pleased to have as an original cosponsor 
on this and to have worked very closely with Mr. Luetkemeyer, who has 
done an admirable job in providing leadership on a much, much needed 
piece of legislation, which is H.R. 4367. As I said, I am proud to be 
an integral part of moving forward a very timely, reasonable, and vital 
piece of legislation.
  Let me just say at the outset, Mr. Speaker, that our banking system, 
our retail system, our credit unions all sit at the center--at the 
epicenter--of this Nation's great economic system, which is facing 
tremendous challenges. As Mr. Luetkemeyer said, we are faced with 
people who are basically scam artists, those who will go in and remove 
the labeling off the ATM machines, knowing that the penalty is upwards 
of one half a million dollars, and then will try to bring class action 
lawsuits against these financial institutions in very tough economic 
times. So this legislation has been developed to address this and to 
fix this so that our banking industry and our financial services 
industry will not have this threat over them.
  What it would do is repeal the requirement for both a physical 
placard as well as an electronic notice disclosing the transaction fees 
on the ATM screens. Currently, as it works now, if an ATM machine does 
not display a physical placard, a financial institution--a bank, a 
credit union or our retailers--can be subject to a class action 
lawsuit, which would potentially amount to, as I said, one half a 
million dollars, or 1 percent of its net worth. This penalty has the 
potential of prompting bogus lawsuits against financial institutions 
simply due to a lack of the physical placard, even when the electronic 
notice is shown to a customer, perhaps because the placard was removed 
by a third party. So you can see that this is not fair for these 
institutions to be faced with up to a half million dollars in penalty 
fees, especially in these tough economic times. At the same time, many 
of these institutions continue to struggle to maintain standard 
operations while being faced with our current economic climate.

                              {time}  1640

  Mr. Speaker, let me just talk about that for a moment because there 
have been 31 bank failures in this country this year alone. About 3 
weeks ago, three banks shut their doors, including the Security 
Exchange Bank in Marietta, Cobb County, Georgia, which is located in my 
district. As a matter of fact, in Georgia alone, 78 banks have closed 
their doors since our crisis began.
  Georgia leads the Nation, unfortunately, in bank closures. That's why 
I am so particularly concerned about it and so pleased to have this 
measure pass, because this sensible legislation that we consider today 
would remove the threat of legal action against financial 
institutions--a bank or a credit union--simply for the lack of the 
physical placard at one of its ATM machines.
  Passage of this bill, as Mr. Luetkemeyer pointed out, will still 
provide the consumer with the protections that they need because a 
notice informing them of any fees will still be required upon the start 
of a transaction on the ATM screen. In addition, consumers will still 
be able to benefit from the convenience that the estimated 445,000 ATMs 
in operation in this country provide.
  I'm very proud to have worked on this bill. It's very timely. It's 
very important for our economy that we move with this bill. The bill 
certainly deserves the strong bipartisan support that we have, and it's 
been a pleasure to work with Mr. Luetkemeyer on it. I urge my 
colleagues to support this measure today.
  With that, Mr. Speaker, I reserve the balance of my time.
  Mr. LUETKEMEYER. Mr. Speaker, it is now my distinct honor to yield 
such time as he may consume to the gentleman from Alabama (Mr. Bachus) 
to

[[Page H4666]]

speak on the bill, our distinguished chairman on the Financial Services 
Committee.
  Mr. BACHUS. Mr. Speaker, I came here to compliment the two gentlemen 
who have spoken on this bill, who are the cosponsors of a bipartisan 
bill.
  When I first heard about this legislation, I thought, like most 
legislation this year, it won't go anywhere. I thought it may pass the 
House, but it may not pass the Senate. I understand that with this 
particular legislation, that our Senate colleagues are waiting for it 
and they're ready to act upon it.
  Mr. Scott brought up, I think, a salient point when he said that 
we're having many banks and credit unions who are struggling, because 
when people don't have jobs, they can't pay back their loans. Our banks 
and credit unions are trying to cope with the added expense of more 
regulation. Particularly at a time like that, but at any time, for 
people to take advantage of a statute that is intended to protect the 
American people is really audacity and greed in its purest sense.
  I'm an attorney, and I can tell you that 999 out of 1,000 attorneys 
or former attorneys would absolutely be enraged to find that very few 
of their colleagues are taking advantage of Regulation E and the 
Electronic Fund Transfer Act to sue these institutions on lawsuits that 
are totally against the public interest, and particularly are against 
the interests of those living in low-income areas and high-crime areas. 
The people in those areas are coping with so much that to add to that, 
having an ATM machine removed from that location or from a low-income 
area, just adds another expense for people who have very little means 
of financing their life today. That's what's happening.
  Either the vandals themselves are going and vandalizing the sticker 
that we've all seen--we've all used an ATM. We've all seen the sticker 
there. We probably didn't notice the sticker there because what really 
caught our attention is when we get on the screen and we see that same 
notice, but that notice actually on the screen requires us to 
affirmatively say ``yes,'' we will agree to it. So people today 
probably don't even notice that sticker. The few people who noticed 
that sticker and took advantage of it were people that were up to no 
good, people that were willing to bring what some of us would call a 
``frivolous lawsuit.''
  These lawsuits can ask for a half million dollars worth of damages. 
And because it is actually a statutory failure to have it, these 
lawsuits sometimes result in a $100,000 or $200,000 judgment. They're 
also resulting in these ATMs not being located in areas that are 
subject to vandalism. Of course, almost any area could be subject to 
it, but we've penalized those Americans who are least able to afford to 
travel a greater distance for the convenience of an AMT machine.
  As Mr. Luetkemeyer and Mr. Scott said, people come up; they scrape it 
off. Some of these appear to be well-organized efforts by the very 
people that bring the lawsuit to go out and do these in an organized 
manner among hundreds of machines. They then come in and file a class 
action.
  Mr. Luetkemeyer, at one time, was a banker in a small Missouri 
community. And in most cases, particularly a small credit union or a 
community bank or a local bank, they can't afford to battle these for 
$50,000 or $100,000--it actually may be a big law firm bringing these 
lawsuits--so they settle them for $50,000. This will put an end to 
that.
  Let me tell you, no one on the Financial Services Committee expressed 
any doubt about this legislation. I don't think anyone would, other 
than those people who are complicit in vandalizing these machines and 
making money on what we sometimes called ``unintended consequences.'' I 
tell you, it certainly was unintended. If we had, in our imagination, 
sat down for days and said what is the worst thing that could happen by 
requiring us to put a sticker on as well as electronic notice, we would 
have never come up with this. We would have never come up with the 
ingenuity of some people to take advantage of the law. But that's 
what's happened here.
  Today, I think, unanimously, hopefully, we're going to shut the door 
on this practice and send this bill over to the Senate, particularly 
for areas where there is high vandalism in our rural communities. We're 
going to set a wrong right.
  Let me say that this is a model for how this Congress ought to 
operate, of coming together, having a consensus, coming up with good, 
commonsense legislation that benefits the public and reduces 
unnecessary costs and puts what I consider and I think is criminal 
behavior out of business. We're going to put some criminals out of 
business with this legislation.
  Mr. Luetkemeyer, Mr. Scott, and all Members who are cosponsoring this 
bill, I commend each and every one of you.
  Mr. DAVID SCOTT of Georgia. Mr. Speaker, in closing I certainly would 
just like to say how important this legislation is.
  As the chairman of our Financial Services Committee, Chairman Bachus, 
just stated, these are sophisticated individuals. These are people who 
know the system. That's why I refer to them as scam artists.
  This is a racket, and it's a racket that we need to put out of 
business that's causing tremendous headaches, tremendous difficulties 
for the heart of our fine economic system, which is our banking system, 
our commercial system. This will go a long way in helping to take away 
a very superfluous but serious enough threat.
  The other thing about this that's very fine is we hear a great cry 
among the American people for great bipartisanship. Here's a great 
example of Democrats and Republicans working together for the good of 
the United States of America.
  Thank you very much for working with me on this, and I appreciate 
having an opportunity to work with you.
  And since I have no other speakers, I yield back the balance of my 
time.

                              {time}  1650

  Mr. LUETKEMEYER. Mr. Speaker, again, I want to thank Mr. Scott from 
Georgia for helping this bill along. As he articulated, Georgia has had 
an inordinate number of banks this past year, 2 or 3 years, that have 
suffered and have gone out of business.
  This is just another situation here where this bill may not be a very 
big bill in the light of things, but it certainly is going to relieve 
some stress on some of our institutions, also some exposure for some of 
our merchants. I think, as our distinguished chairman articulated, it's 
time to put some of these folks out of business as well.
  I have had, unfortunately, some of these things go on in my district, 
and this is how it was brought to my attention. But I think we have 
come together as a group, and we had a great meeting the other day in 
Financial Services and had strong bipartisan support. We have the 
support in the Senate.
  With that, I will close and ask for the support of the body.
  I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Missouri (Mr. Luetkemeyer) that the House suspend the 
rules and pass the bill, H.R. 4367.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. DAVID SCOTT of Georgia. Mr. Speaker, on that I demand the yeas 
and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this question will be postponed.

                          ____________________