In an effort to stop nuisance lawsuits, the U.S. House of Representatives has passed Rep. Blaine Luetkemeyer’s (MO-9) bipartisan bill that would eliminate the requirement that ATMs display duplicative signs disclosing their fees, in light of the fact that ATM users must separately receive an on-screen notice of any charges. The bill passed the House today by a vote of 371-0.
 
“I was prompted to file this bill after I learned that one person in Missouri visited five ATMs and had threatened to sue over missing fee-disclosure stickers and settled the cases for more than $100,000,” Luetkemeyer said. “These nuisance lawsuits have been a problem throughout the country and the costs to institutions are passed on to hard-working consumers. Folks on both sides of the aisle understand that this is an issue that has to be fixed. I am extremely pleased that this bill has received overwhelming bipartisan support and I remain hopeful that the Senate will move quickly on this bill.”

Luetkemeyer’s measure would amend the Electronic Funds Transfer Act (EFTA). Under current regulations, ATM operators are required to post both a notice of a transaction fee on or near the ATM and provide an on-screen notice of the fee during the transaction. Under the EFTA, a consumer who uses an ATM which does not have a notice of a transaction fee posted on or near the ATM, and is charged a fee, can bring an action against the ATM operator and recover statutory damages between $100 and $1,000 for each transaction regardless of whether the consumer suffered any actual injury. In the case of class actions, the EFTA does cap class action damages under the Act at the lesser of $500,000, or one percent of the net worth of the defendant. In addition to damages, the EFTA also provides for attorney's fees and costs.

Kurt Helwig, president of the Electronic Funds Transfer Association, recently told American Banker that more than 500 cases have been filed against banks, credit unions and retailers that have ATMs. The publication reported that in some cases, there were suspicions that an individual may have actually removed the ATMs fee-disclosure sign before filing suit. Among the co-sponsors of the legislation are 44 members of the House Financial Services Committee, on which Luetkemeyer serves. The legislation, H.R. 4367, has 145 co-sponsors, including 56 Democrats. The bill will go to the Senate where a companion bill has been filed by Sen. Mike Johanns (R-NE).