Not long ago, first community bank and Trust of Beecher, Ill., added an unusual item to the checklist for routine maintenance performed on its three automated teller machines. The maintenance worker had to take a time-stamped photo of the machine, to be kept on file at the bank as a potential legal defense.

"It sounds silly. But we wanted to have a process [so] that we could say in court, if necessary, that we were doing our due diligence," says Greg Ohlendorf, the CEO of the $147 million-asset First Community.

"I don't know how that would have stood up," he adds, noting that his bank was never sued under a law that required physical signs notifying ATM users of potential fees.

"Thank God I didn't have to go through that."

Now, countless more banks will be spared of the burden, thanks to a new law overturning the placard requirement.

The mandatory placard law was widely seen as redundant, given that modern ATMs give users the opportunity to accept or refuse fees via notifications that are right on the screens. But it was seized on by plaintiffs' attorneys, who, by one estimate, filed as many as 2,000 lawsuits against ATM operators that failed to display the placards.

The new law, which already has been signed by President Obama, took more than eight months to enact. But it was a victory for a broad coalition of banks, credit unions, convenience stores, casinos and independent ATM operators. For the owners of ATMs, the law's impact can be measured not only by shorter maintenance checklists but, more significantly, in reduced legal costs.

"The case for the bill was straightforward, streamlining a duplicate, unnecessary requirement while protecting notice and access for the consumer," says June Langston DeHart, a partner at Manatt, Phelps & Phillips LLP in Washington.

"It's going to close the door on these spurious lawsuits."

Her law firm represents Cardtronics, one of the world's largest independent ATM operators, with more than 36,000 machines worldwide. Cardtronics estimates that it spent more than $1 million over the last 18 months defending the suits, DeHart says.

No industry-wide data is available on the impact of the lawsuits, but Bruce Renard, executive director of the National ATM Council, estimates that 2,000 such suits were filed, and many of them settled out of court for around $10,000 each.

Predating a new spate of lawsuits involving allegations of ATM noncompliance with the Americans With Disabilities Act, the ATM fee-notice suits were often brought by lawyers who were associated with individuals who would scout for machines with missing placards. In somecases, it appeared that the plaintiff had actually vandalized the ATM by removing the placard before withdrawing cash. Those allegations were what led banks as small as First Community and as large as Wells Fargo to start taking photographs of their machines.

"Checking the ATM once a year for signage is not enough," Thomas Alleman, a Dallas lawyer who represented community banks in these suits, wrote in a 2011 article that gave banks advice on how to fight back. "There should be signed and dated records showing that checks were made and signs replaced."

No matter how permanent the sign was made, it could be vandalized, according to Alleman, who is with the law firm Cox Moore.

"Pried off, peeled off, whatever," he says. "And there's no question that this increased the cost for banks."

The new law also makes sense for customers, suggests Alicia Moore, Wells Fargo's head of ATM banking. Providing fee information on screen is "a better customer experience than having a sticker somewhere on the hardware," she says.

Delta Community Credit Union was one of the institutions that got sued under the old law. The case got settled within months, according to general counsel Bob Manning, but it was a nuisance for the Atlanta-based credit union. He is pleased with the new law. "It's just one less item that we need to concern ourselves with," he says.

One lingering issue for banks is whether the new law will impact lawsuits filed prior to the law's enactment, says Eric Magnuson, a lawyer at Nutter, McClellen & Fish LLP in Boston, who has defended financial institutions in these cases. But eventually the old cases will be resolved, "and the class-action plaintiffs will have to find something else to complain about," Magnuson says.

"It's kind of like whack-a-mole. You hit one thing and they find another."

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