When the financial-services industry came together this year to oppose the Durbin amendment to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, retail ATM deployers were ready to do their part with the help of the ATM U.S. Defense Fund.
The fund, formed by the ATM Industry Association, has attracted $260,000 in pledges since mid-February from ATM deployers, manufacturers, processors and sponsoring banks, says Tim Matthews, CEO of Grant Victor Inc., a Kaysville, Utah-based ATM deployer and supplier, and a volunteer fundraiser.
Some contributors have signed up for payment plans to make monthly or quarterly donations, and the fund has collected $56,000 of this year’s pledges so far, Matthews says.
This year, the fund has become part of a broad financial-services industry effort to shape the Durbin rules, says David Fish, senior analyst at Maynard, Mass.-based Mercator Advisory Group Inc.
“The anti-Durban side has really taken on the characteristic of ‘all hands on deck,” Fish says. “So this ATMIA effort is just one facet of a much larger picture.”
Breaking that facet into its component parts, a “good share” of the funds raised this year has come from deployers, but other members of the industry see the value of the collective action, too, Matthews says. “The fund’s for the whole U.S. industry,” he says.
Fundraising appears likely to continue because of the industry’s ongoing issues, Matthews says. The ATM Industry Association anticipates spending $380,000 this year to defend its positions on issues, according to the association website.
Among the more-immediate needs, the association is using the funding to try to convince the Federal Reserve Bank to rule under the Durbin amendment that ATM owners can choose among networks to route transactions over the network that pays the highest interchange fee, ATM Industry Association position papers say.
The fund also helps the association maintain a presence in Washington and work with the U.S. Department of Justice, the Federal Reserve Board and the new Consumer Financial Protection Bureau, and state and local government, the association website says.
The issues the industry has faced, from Hardin to Durbin, have convinced deployers and manufacturers to take collective action, Matthews says.
“They’re all coming together in a very unprecedented way,” he says of enthusiasm for the fund from many corners of the industry. “It’s exciting to see the amount of support.”
When the association started the defense fund in 2006, few ATM deployers could have foreseen the challenges that lay ahead.
Even after the fund was created, individual members of the industry worked on state and local legislative and regulatory issues, such as opposition to ATM surcharge caps, mostly on their own or in small groups, sometimes with association help, Matthews says.
It was not until 2010 that opposition to the Harkin amendment united the industry nationally. Sen. Tom Harkin, D-Iowa, had proposed capping ATM surcharge fees at 50 cents.
“That was a real grassroots effort” of ATM deployers reaching out to merchants, he says.
Deployers recruited merchants, Matthews says, by asking key questions. “ ‘How valuable is an ATM within your hotel, your convenience store or your grocery store,’ ” Matthews says deployers asked their customers. “And they all said, ‘It’s imperative. We need for our customers to have access to cash.’ ”
As merchants joined the industry in circulating petitions and firing off letters to their senators, a new collective consciousness emerged, Matthews says. “We became one voice working together for the same cause,” he contends.
Other issues that have helped galvanize the industry’s efforts include regulations decreed under the Americans with Disabilities Act. The industry is lobbying the Justice Department of for a five-year “safe harbor” to postpone meeting requirements dictating ATM heights for wheelchair access, raised symbols on keypads and headphone jacks for voice-guided instructions on using ATMs for the blind.
Meanwhile, deployers are assessing their ATM portfolios and are planning ways to comply the disability requirements by the March 15, 2012, deadline.
With an estimated 270,000 retail ATMs, even a full assessment–let alone full compliance–constitutes “a significant task,” Matthews says.
Newer ATMs meet the guidelines, but many deployers have a number of older machines still in the field. “Those take more time to upgrade, and there are costs associated,” he says.
Not every ATM is upgradeable, Matthews adds. “Here’s an ATM that’s been working fine all these years, and we’re talking about basically junking it,” he says.
Besides the disability requirements, the industry is continuing to petition the federal authorities to end the requirement that ATMs bear decals warning consumers of surcharges.
Vandals sometimes peel off the decals, and con artists occasionally remove them and file a frivolous lawsuit because of their absence, Matthews says.
Even in the absence of a decal, ATMs still display a screen warning of the surcharge.
Deployers often photograph the machines with the decals, but criminals can remove the decals at any time. That sort of unappreciated effort makes ATM deployers willing to part with “hard-earned dollars” to support the defense fund, Matthews says.
