Banks in Chicago are again negotiating with city officials over automated teller machine security, hoping to avoid passage of stringent laws similar to ones New York City enacted last year.

But in Westchester County, N.Y., legislation mandating minimum ATM safety measures designed to thwart crime appears inevitable, officials said.

Several cities, including New York, have passed laws over bankers' objections that require financial institutions to install video cameras, rearview mirrors. and other security equipment at all ATMs.

Chicago banks have successfully avoided such legislation by meeting with local lawmakers and agreeing to adopt some basic safety measures, such as improved lighting at ATM sites.

The banks, organized and led by the Cash Station ATM network. hope that a round of meetings begun earlier this month will continue to make legislation unnecessary.

Legislation Looms

But while bankers in Westchester County are planning similar meetings with their local politicians, it now seems less likely that ATM security legislation in the county, which is just outside New York City, can be avoided.

According to Andrew A. Albanese, the majority leader of the Westchester County legislature, the county government is likely to introduce ATM legislation similar to the Big Apple's by the end of the year.

"We would like to give banks the opportunity to do this on a voluntary basis," he said.

"But if the New York [City] legislation is any indication, banks aren't going to do anything unless they are forced to."

Mr. Albanese said the impetus for the legislation is a recent rash of robberies in the towns bordering New York City.

He said that police and bank statistics indicate that the number of robberies of ATM customers is higher closer to the city.

In spite of that, Mr. Albanese, who is chairman of a safety committee that will oversee hearings on the new legislation, said he feels an ATM security law for the entire county is both necessary and likely to be passed.

Reluctance by Banks Seen

"I talked to New York City [council members] on this, and it was apparent that the banks fought them every step," he said.

"That does not indicate to me a willingness on banks' parts to do anything on this without being ordered to."

The legislation Mr. Albanese has in mind would closely resemble New York City's, which took effect in February and requires all ATM sites to be equipped with video cameras, mirrors to allow customers to see behind them, proper lighting, and signs giving ATM safety instructions.

Card Reader Provision

One provision in the New York City law requiring improvements to the card readers that regulate entry to the ATM site is still being debated.

Originally, the provision required that the card readers take personal identification numbers before allowing a ATM users to enter a site.

But bankers and legislators are still studying whether that is technically feasible.

Mr. Albanese said it is unclear whether a card reader provision will be included in the bill he plans to introduce.

Meanwhile, in Chicago, the banks have contacted the City Council about revisiting the issue of ATM security and perhaps updating the measures that most banks currently employ.

"The key is that we aren't waiting for a problem to develop before we convene," said Stephen Cole, president of the Cash Station, which initiated the talks between its bank members and local officials.

Despite the fact that Chicago banks are not required to adhere to a minimum security standard, many banks have installed cameras and other safety equipment.

The number of reported ATM robberies in Chicago dropped from 57 in 1992 to 17 in 1993, said Mr. Cole, citing police statistics.

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