The Chicago City Council has introduced an ordinance designed to improve security at the city's automated teller machines.

The legislation would establish minimum lighting standards for selected ATM sites, while also placing new reporting responsibilities on Chicago-based financial institutions, which have more than 800 machines in place.

Chicago would not be the first place such legislation had been enacted. New York City, Ann Arbor, Mich., and several states have laws requiring banks to install security measures around ATMs.

Surprise Move

But the bill put before the Chicago City Council on Nov. 5 nonetheless came as a surprise to many observers.

Despite a much-publicized abduction, robbery, and murder of a Chicago ATM user in 1989 - a crime that many credit with putting ATM security on the national agenda - Chicago banks have thus far managed to avoid legislation by submitting voluntarily to standards recommended by the police and legislators.

Yet legislators and executives at the major Illinois ATM network, Cash Station, believe the need still exists to get the legislation on the books.

The Requirements

"We believe the vast majority of financial institutions in this area behave responsibly, but there is a small portion of the bank population for which the legislation is necessary," said Stephen S. Cole, president of Chicago-based Cash Station, which connects about 2,000 ATMs.

The legislation would require banks doing business in Chicago to adhere to minimum lighting standards for ATM sites away from banking offices.

Many of the off-premises sites will be exempt from the law by virtue of their being located in high-traffic areas.

In addition, the law would require financial institutions that use Chicago as their "principal place of business" to furnish all ATM cardholders with safety information on a regular basis.

Finally, Chicago-based banks would have to record and report to the city clerk their security measures and the incidence of crimes at each ATM location within city limits.

Not as Stringent as Others

People familiar with ATM security laws said the Chicago proposals are not nearly as demanding as measures in other areas.

In New York, which has what is widely recognized as the nation's most stringent ATM security law, every ATM site within city limits must have a video camera, mirrors that allow customers to see behind them during a transaction, and adequate lighting.

Also, in some cases, sites must have sophisticated card readers that require cardholders to enter an identification number before being allowed into an ATM enclosure.

Chicago banks have so far avoided such strict measures by taking security steps on an as-needed basis.

According to the city's ATM Security Advisory Committee, consisting of city officials, network representatives, and bankers, 59% of Chicago's 817 ATMs are monitored by security cameras and 48% have guards nearby for at least part of the terminals' hours of operation.

Cooperation Noted

City officials said they took these good-faith efforts into consideration when composing the bill.

"The cooperation of the banks has been very good," said alderman William Beavers, a co-sponsor of the Bill.

"They took a lot of steps prior to the legislation, and that has had an effect on what is contained in it."

Another reason for the restrained nature of the security requirements was the low level of ATM crime in the Chicago area in the last few years, the alderman said.

According to police statistics, there has been a decline in ATM-related crime.

In the year ending in June, the police recorded only 47 ATM crimes, a decrease of 17.5% from the previous year.

This reduction in crime comes as the number of ATMs in the city of Chicago has increased from 535 in 1990 to 817 this year.

Hearing in 3 Weeks

Mr. Beavers said the bill will be given a hearing in about three weeks and could be put to a vote at that time as well.

The law would take effect July 1, 1995.

"Chicago's ATM crime rate is small compared to some other urban areas around the country," said F. Barry Schreiber, professor of criminal justice at St. Cloud State University in St. Cloud, Minn.

"That fact, coupled with some proactive positioning by the network, combined to make heavy-handed legislation unnecessary."

Second-City Standards

Proposed ATM security requirements for Chicago, to take effect July 1, 1995

1 Adequate lighting in and around stand-alone ATMs

2 Annual distribution to customers of basic ATM safety information

3 Reporting to city clerk to confirm compliance

4 Reporting to city clerk on incidence of crime at ATMs

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