BROOKLYN, NY -- The National ATM Council has been locked in continual battles since its formation in 2011. It has fought misguided regulations, sought to rectify the unintended consequences of hastily passed laws, and striven to resolve marketplace conflicts with financial industry giants.
Because "retail" ATMs -- off-premise equipment (i.e., not in banks) -- are relative newcomers to the cash machine sector, having come on the scene in 1996, legal standards and best practices for their operation continue to evolve. That process often involves a fight.
PHOTO: NAC chairman George Sarantopoulos, Access One Solutions (Brooklyn, NY), leads the charge. He’s pictured here with his wife Heidi Chan, Access One CFO and NAC Conference Committee member.
Take, for instance, the former federal "fee sticker" law, which required redundant-fee disclosures: one displayed on the ATM screen and another imprinted on a sticker affixed to the machine. As it turned out, the stickers themselves were not the real issue. The problem was that it gave rise to an attorneys' cottage industry: when those stickers were deliberately or accidentally removed, thousands of resulting lawsuits generated costly settlements -- and guaranteed legal fees. Congress eliminated the sticker law in 2012 and the onscreen notification and "opt out" option have worked just fine ever since.
"We fought the sticker law, and won a repeal of it," said NAC board chair George Sarantopoulos of Access One Solutions (Brooklyn, NY). "The law was costly and resulted in a lot of nuisance lawsuits; ending it was important."
At about the same time, the association acted to ensure that Americans with Disabilities Act rules governing access to ATMs were reasonable and practical. "We were able to work with the Department of Justice to change some of the proposed ADA requirements for retail ATMs," Sarantopoulos reported. "We weren't able to get them to back away from voice guidance retrofitting, but what we did get made the new regulations much more livable."
NAC is the only trade association dedicated solely to retail ATM deployers. "We're an organization for those guys down in the trenches every day," Sarantopoulos said; "the guys who are out servicing their machines, getting their hands dirty. We understand their concerns, and we fight for them."
Right now, NAC is facing two big battles. The first is clearing up misinformation and confusion that has led to the misapplication of the Justice Department's Operation Choke Point program to retail ATM companies. Rolled out in 2013, Choke Point was instituted to "choke off" access to banking services by businesses suspected of money laundering. Even though retail ATMs were not on the dreaded Federal Deposit Insurance Corp.'s "hit list" of disfavored business types, ATM companies were still profiled as suspects, simply because they are in cash-intensive businesses.
"This is an extinction-level type of law for many operators," Sarantopoulos said. "If operators can't get access to banking services, they're out of business. And many banks are deciding that it may not be worth the risk, even if the operator goes in and talks to them and explains how the business works."
The ongoing effort by NAC has made progress in helping ATM companies deal with Choke Point in specific cases, but, as Sarantopoulos noted, this remains a real problem for the industry, and more needs to be done. Lobbying efforts are now under way in Washington, and NAC officials are hopeful that the recent change of administration will help them finally get the situation resolved.
In another major battle, the association recently won a crucial U.S. Supreme Court victory in its six-year-old antitrust lawsuit against credit card giants Visa and MasterCard. The lawsuit, filed in 2011, challenges network rules that restrict prices ATM providers can charge for transactions handled by the different networks. NAC claims these rules have allowed the global networks to impose anticompetitive fees, costs and conditions on ATM operators, while denying them the ability to reflect those costs in their pricing to consumers. The networks have worked hard to slow down the litigation, but the recent U.S. Supreme Court ruling allows the suit to continue. With highly regarded Judge Richard Leon now presiding, the trial is expected to move forward on the merits.
"We feel very good about our case and about the judge who is handling the trial," Sarantopoulos told VT. "We are confident that we'll get a fair shake and we're optimistic that we'll prevail."
If successful in court, NAC's legal action will create a more competitive environment for network services to U.S. retail ATMs, which should translate into lower ATM fees and more services for consumers.
In addition to these important national issues, NAC is waging battles on behalf of ATM operators at the local level. Sarantopoulos explained that local municipalities are looking to impose increased regulations on retail ATMs and locations. Prompted by a string of high-profile crimes against retail ATMs and an apparent increase in card "skimming" in advance of the full shift to the more secure EMV card protocol, New York City and Cleveland both have been considering regulations to impose daily inspection requirements, exacting lighting requirements that would specify the required illumination at each machine in "lumens," burdensome video monitoring, anti-vehicle barricades and other costly "one-size-fits-all" requirements.
"ATM deployers and merchants already have a strong incentive to ensure safety and security for our ATM equipment and our patrons," said Sarantopoulos. "We would like to see state and local governments step up their ATM-related criminal penalties and enforcement programs to catch criminals and keep them off the streets."
Sarantopoulos emphasized that NAC will continue working with the states and cities on these issues. In many cases, he explained, this generally is more of an education process than a fight. For instance, the imposition of those lumen standards, which apparently were based on unattended bank vestibules where ATMs are located, isn't a right fit for a well-trafficked and monitored nightclub or tavern. Similarly, the rapidly evolving threat of high-tech thieves targeting ATMs and their users is an area in which the industry can provide invaluable information to law enforcement.
"NAC is very much a lobbying organization, and we're the only organization that's 100% dedicated to the U.S. retail ATM deployers and suppliers," Sarantopoulos summed up. "We understand their concerns. And we will keep fighting for this industry and promoting best practices."
National ATM Council Addresses NYC Council On Proposed Regulations Targeting Nonbank Cash Machines