On Deadline

Register now

Suit Against Diebold By Servicers Dismissed

SAN FRANCISCO-A federal court here last week dismissed a suit brought by the nation's ATM servicers against Diebold Inc., claiming the ATM maker controlled the market for ATM upgrades, particularly with respect to the Triple DES security standards.

The request for dismissal was filed by the Financial and Security Products Association, which represents more than 350 ATM maintenance companies around the country.

The dismissal came three weeks after the court denied a request by the ATM servicers to block a Diebold policy on Triple Data Encryption Standard-better known as Triple DES-upgrades as unfair and anticompetitive.

In denying the request for a preliminary injunction, the court ruled that the ATM servicers failed to prove that the limited market for Triple DES upgrades qualified as a market under the Sherman Antitrust Act. Furthermore, the court ruled that Diebold was no longer preventing the servicers from performing the ATM upgrades, but allowing them to do so after paying a licensing fee.

"This decision clears the way for us to continue to make and build upon the considerable investments in our superior technology and intellectual property that we believe provides customers with the most dependable services available," said David Bucci, senior vice president of Diebold Customer Solutions.

The FSPA did not return phone calls seeking comment.

The ATM servicers filed the suit last November when an original March 31 compliance deadline for Triple DES set by MasterCard loomed and Diebold's policies prevented any third-party vendors from buying, installing or performing maintenance on the company's EPP4 keypad, required for upgrades. But since then, Diebold has changed its policy to allow third parties to install the keypads as long as they pay a licensing fee to Diebold.

Still, the ATM servicers argued the policy amounted to a restraint of free trade under the Sherman Antitrust Act, because the keypads are necessary to upgrade a large portion of the nation's 250,000 ATMs by the Dec. 31 deadline now set by Visa and MasterCard for Triple DES compliance.

But last month the U.S. District Court for the Northern District of California issued a ruling denying the group's request for preliminary injunction because it believed the group did not have a good chance of proving its case at trial.

Ed Roberts

OACU Restores Most Services

FORT WORTH, Texas-OmniAmerican CU said last week it had restored most of its member services after a computer crash shut down all services for several days. The credit union's entire banking system had been unavailable since the weekend, with some members unable to make automated mortgage payments or withdraw more than a few hundred dollars from their OmniAmerican accounts.

OmniAmerican officials said the credit union had a database problem and was able to get its systems up and running in its branches and on its phone service by midweek, but its Internet banking system was still not available.

Man Guilty In Murder Attempt

KANSAS CITY-A federal jury convicted a man last week of arranging the murder of a former roommate who was expected to be a witness against him in a Nebraska credit union robbery case and could be sentenced to death in the penalty phase of the trial.

Xavier Lightfoot was also found guilty of conspiracy to murder a federal witness and of aiding and abetting the murder, as well as conspiracy to rob to Educators FCU in Omaha in 1997. John Wayne Hogsett was killed in June 1998 at the Kansas City home where he lived with Lightfoot, who was then in prison awaiting trial. Hogsett, who lives as a woman under the name Jovan Ross, was helping the FBI's investigation of the CU hold-up and several other Midwest robberies. Among the witnesses against Lightfoot was Cornelius Peoples, who hired the killers. Peoples pleaded guilty last year and agreed to testify against Lightfoot.

First Tech In The Movies

REDMOND, Wash.-Area residents were once again treated to free movies at Marymoor Park, thanks to First Tech CU.

A $10,000 sponsorship check from the Portland-based credit union helped fund the free movie program, put on by the King County Parks and Recreation Department. The first of five movies to be screened this summer at First Tech Movies Marymoor was "Best in Show,'' a "mockumentary" about dog shows. Though the movies are free, a $5 donation is requested, which will go to help fund area non-profits.

Revenue Rises At Harland

ATLANTA-John H. Harland Co. said net income for its second quarter more than doubled to $18.8 million, or 67 cents a share, on the rise of its printed products division and two corporate acquisitions. Revenue rose 24% in the second quarter, compared to the same quarter last year, to $239.4 million. Sales for the company's core printed products unit rose 26% for the quarter to $148.8 million.

The Credit Union Journal's On Deadline coverage is sponsored by Liberty. For info: www.libertysite.com. (c) 2005 The Credit Union Journal and SourceMedia, Inc. All Rights Reserved. http://www.cujournal.com http://www.sourcemedia.com

For reprint and licensing requests for this article, click here.
MORE FROM AMERICAN BANKER