ATM security, once a favorite issue of consumer advocates, has been shoved from the spotlight in recent years by user fees.
But a high-profile crime at an automated teller machine has refocused attention on the security issue, pitting bankers and politicians against one another on whether government should regulate ATM safety.
Attempts to pass federal legislation all have failed, and only a dozen states have regulations in place. Since a wave of state-level legislation petered out in the mid-1990s, efforts to broaden such regulation have languished.
That changed last month, when an attack in New York City was captured on an ATM surveillance camera that had an unusable videotape. Soon afterward the New York State Banking Department and Gov. George Pataki imposed an emergency regulation governing how often surveillance camera videotapes can be reused.
The provision adds new teeth to legislation passed in 1996 that was considered by many the toughest ATM safety law in the country.
In further reaction, the city's consumer affairs commissioner, Jules Polonetsky, is drafting a proposal that would restore the city's authority to inspect for ATM violations -- a power that was taken away when the state law incorporated a 1992 city law.
Michael P. Smith, the president of the New York Bankers Association, said many banks are apparently already in compliance and are "generally supportive" of the regulation.
"The banks obviously care very deeply about the welfare and safety of their customers," Mr. Smith said. "This type of incident is one that they take very, very seriously."
But bank security experts watching the state's regulatory response from other parts of the country say such government intervention is unwarranted. In this and other cases, they say, a highly politicized incident prompted a knee-jerk reaction.
"It's just more government regulation and minutia that can be handled at the local level in cooperation with law enforcement," said William Wipprecht, director of security for San Francisco-based Wells Fargo & Co.
Barbara Hurst, a bank security specialist who edits Bankers' Hotline, a newsletter based in Brookhaven, Pa., warns that the New York videotape regulation could set a precedent.
"In comparison to the millions of transactions that take place every day on ATMs, there are so few crimes it just seems to me to be total overkill," she said. "It's good politics, but perhaps not good banking."
Sonia Barbara, a spokeswoman for the American Bankers Association, said bankers "have every interest in making sure their cameras are working properly." However, she said, "ATM sites are unique, and security devices for each and every ATM should be determined on an individual basis."
Boris F. Melnikoff, the corporate director of special services at Wachovia Corp., said the New York regulation is "like saying to us that you must set your time locks for eight hours -- no more, no less." The best course "depends on the given environment," he said.
As in New York, security standards for after-hours ATMs have been adopted by California, Florida, Georgia, Illinois, Louisiana, Maryland, Nevada, New Jersey, Oregon, Texas, and Washington. High-profile crimes sparked many of the standards.
The California law passed in 1990 was the archetype for those in other states. Most of the laws do not cover ATMs inside buildings such as supermarkets, airports, and gas stations. Only New York and New Jersey require surveillance cameras, though many banks use them at some ATM locations.
Some security experts say cameras, unlike other safety precautions, are an investigative tool rather than a preventive measure. Mr. Melnikoff said bank robbers know there are cameras in branches, for example, but are undeterred.
Industry experts lament the lack of up-to-date statistics on ATM crime nationwide. Barry Schreiber, a criminal justice professor at St. Cloud State University in Minnesota, said the number of robberies has grown with the number of transactions, leaving the robberies/transactions ratio essentially unchanged in the last decade. Mr. Schreiber, who is also the editor of ATM Crime and Security Newsletter, puts that ratio at about one robbery per 3.5 million transactions. In 1999, that would have meant roughly 3,400 robberies, he said.
In New York City, however, ATM robberies have plunged. Between 1990 and 1998 the number shrank to from 378 to 127, according to police officials.
New York City Councilman Walter L. McCaffery attributes the decline to the city's ATM safety law, of which he was the prime sponsor. Bankers fought the legislation, arguing that its broad strokes would impose a heavy financial burden while not adequately addressing the security problems. Ultimately, however, the New York Bankers Association supported the 1996 state law into which the city ordinance was folded. The regulations require a security camera in each bank-owned ATM and set standards for lighting, signage, and other security provisions.
"This is the type of item that the federal government could, in fact, step up to the bat and address," Mr. McCaffery said. "We've seen how the safety improved in New York City following the measures that have been put forth."
Compliance with these safety requirements has also apparently improved, though the data are hard to compare. In the first 14 months of inspections -- November 1997 to December 1998 -- 4,872 inspections (including reinspections) found 2,292 violations for faulty lighting, mirrors, cameras, and the like, according to the Banking Department. In 1999 there were 3,589 inspections and 1,035 violations.
Still, incidents like the December attack are sobering. In 1997, Jonathan Levin, son of Time Warner chief executive officer Gerald Levin, was murdered for his ATM card. A videotape of a man believed to have been using the card shortly afterward was reportedly hazy, though Mr. Levin's killer was ultimately caught. Chase Manhattan Corp., which owned the ATM, said it could not put the camera in a good position in the historic building.
Mr. Polonetsky, the city consumer affairs commissioner, is careful not to criticize the "very effective job" that the Banking Department is doing. However, he said his proposal would let inspectors from his agency who are already visiting stores add ATMs to their list.
"The Police Department informs me that in case after case they come across cameras that are not working," he said. "No bank would accept the shabby maintenance inside their branches that seems to be provided to these [ATM] cameras."
Indeed, bankers have to defend against the notion that ATMs get second-rate treatment. They say that though ATMs are not specifically addressed by the federal Bank Protection Act, which requires banks to have security officers and security programs, the machines are obviously parts of banks.
"I think the security officer has always felt that the ATM is simply part of the normal duties that face a security officer," said Ms. Hurst of Bankers' Hotline. "I don't think ATMs need separate legislation any more than tellers need separate legislation."
Still, Wachovia's Mr. Melnikoff said that though he has yet to see a branch without a camera or an alarm system, Wachovia is taping activity at only about half its ATMs.
It is generally agreed that ATM hold-ups are less frequent than bank robberies. Industry experts say there were roughly 7,500 bank robberies last year, against Mr. Schreiber's estimate of 3,400 ATM robberies.
Others point out that ATM crime is usually an entirely different animal -- the nonviolent use of a card. "Most of our ATM crimes are fraudulent withdrawals by family members," Ms. Hurst said.
Also, ATM card users are more likely to be scammed than robbed, said Ralph M. Fatigate, the New York Banking Department's director of criminal investigations.
Many banks say consumer common sense is the best protection. For instance, ATM users should not go to poorly lighted locations, security experts say.
"People really should be aware of their surroundings" Mr. Fatigate said. If they do not feel comfortable at an ATM location, "by all means they should leave."
