[Congressional Record Volume 145, Number 65 (Thursday, May 6, 1999)]
[Senate]
[Pages S4847-S4848]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
FINANCIAL SERVICES MODERNIZATION ACT OF 1999
The Senate continued with the consideration of the bill.
Amendment No. 314
(Purpose: To make an amendment with respect to ATM fee reform)
Mr. SCHUMER. Mr. President, I have an amendment which I send to the
desk.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from New York [Mr. SCHUMER] proposes an
amendment numbered 314.
Mr. SCHUMER. Mr. President, I ask unanimous consent reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
At the appropriate place, insert the following:
TITLE VII--ATM FEE REFORM
SEC. 701. SHORT TITLE.
This title may be cited as the ``ATM Fee Reform Act of
1999''.
SEC. 702. ELECTRONIC FUND TRANSFER FEE DISCLOSURES AT ANY
HOST ATM.
Section 904(d) of the Electronic Fund Transfer Act (15
U.S.C. 1693b(d)) is amended by adding at the end the
following:
``(3) Fee disclosures at automated teller, machines.--
``(A) In general.--The regulations prescribed under
paragraph (1) shall require any automated teller machine
operator who imposes a fee on any consumer for providing host
transfer services to such consumer to provide notice in
accordance with subparagraph (B) to the consumer (at the time
the service is provided) of--
``(i) the fact that a fee is imposed by such operator for
providing the service; and
``(ii) the amount of any such fee.
``(B) Notice requirements.--
``(i) On the machine.--The notice required under clause (i)
of subparagraph (A) with respect to any fee described in such
subparagraph shall be posted in a prominent and conspicuous
location on or at the automated teller machine at which the
electronic fund transfer is initiated by the consumer; and
``(ii) On the screen.--The notice required under clauses
(i) and (ii) of subparagraph (A) with respect to any fee
described in such subparagraph shall appear on the screen of
the automated teller machine, or on a paper notice issued
from such machine, after the transaction is initiated and
before the consumer is irrevocably committed to completing
the transaction.
``(C) Prohibition on fees not properly disclosed and
explicitly assumed by consumer.--No fee may be imposed by any
automated teller machine operator in connection with any
electronic fund transfer initiated by a consumer for which a
notice is required under subparagraph (A), unless--
``(i) the consumer receives such notice in accordance with
subparagraph (B); and
``(ii) the consumer elects to continue in the manner
necessary to effect the transaction after receiving such
notice.
``(D) Definitions.--For purposes of this paragraph, the
following definitions shall apply:
``(i) Electronic fund transfer.--The term `electronic fund
transfer' includes a transaction which involves a balance
inquiry initiated by a consumer in the same manner as an
electronic fund transfer, whether or not the consumer
initiates a transfer of funds in the course of the
transaction.
``(ii) Automated teller machine operator.--The term
`automated teller machine operator' means any person who--
``(I) operates an automated teller machine at which
consumers initiate electronic fund transfers; and
``(II) is not the financial institution which holds the
account of such consumer from which the transfer is made.
``(iii) Host transfer services.--The term `host transfer
services' means any electronic fund transfer made by an
automated teller machine operator in connection with a
transaction initiated by a consumer at an automated teller
machine operated by such operator.''.
SEC. 703. DISCLOSURE OF POSSIBLE FEES TO CONSUMERS WHEN ATM
CARD IS ISSUED.
Section 905(a) of the Electronic Fund Transfer Act (15
U.S.C. 1693c(a)) is amended--
(1) by striking ``and'' at the end of paragraph (8);
(2) by striking the period at the end of paragraph (9) and
inserting ``; and''; and
(3) by inserting after paragraph (9) the following:
``(10) a notice to the consumer that a fee may be imposed
by--
``(A) an automated teller machine operator (as defined in
section 904(d)(3)(D)(ii)) if the consumer initiates a
transfer from an automated teller machine which is not
operated by the person issuing the card or other means of
access; and
``(B) any national, regional, or local network utilized to
effect the transaction.''.
SEC. 704. FEASIBILITY STUDY.
(a) In General.--The Comptroller General of the United
States shall conduct a study of the feasibility of requiring,
in connection with any electronic and transfer initiated by a
consumer through the use of an automated teller machine--
(1) a notice to be provided to the consumer before the
consumer is irrevocably committed to completing the
transaction, which clearly states the amount of any fee which
will be imposed upon the consummation of the transaction by--
(A) any automated teller machine operator (as defined in
section 904(d)(2)(D)(ii) of the Electronic Fund Transfer Act)
involved in the transaction;
(B) the financial institution holding the account of the
consumer;
(C) any national, regional, or local network utilized to
effect the transaction; and
(D) any other party involved in the transfer; and
(2) the consumer to elect to consummate the transaction
after receiving the notice described in paragraph (1).
(b) Factors To Be Considered.--In conducting the study
required under subsection (a) with regard to the notice
requirement described in such subsection, the Comptroller
General shall consider the following factors:
(1) The availability of appropriate technology.
(2) Implementation and operating costs.
(3) The competitive impact any such notice requirement
would have on various sizes and types of institutions, if
implemented.
(4) The period of time which would be reasonable for
implementing any such notice requirement.
(5) The extent to which consumers would benefit from any
such notice requirement.
(6) Any other factor the Comptroller General determines to
be appropriate in analyzing the feasibility of imposing any
such notice requirement.
(c) Report to Congress.--Before the end of the 6-month
period beginning on the date of the enactment of this Act,
the Comptroller General shall submit a report to the Congress
containing--
(1) the findings and conclusions of the Comptroller General
in connection with the study required under subsection (a);
and
(2) the recommendation of the Comptroller General with
regard to the question of whether a notice requirement
described in subsection (a) should be implemented and, if so,
how such requirement should be implemented.
SEC. 705. NO LIABILITY IF POSTED NOTICES ARE DAMAGED.
Section 910 of the Electronic Fund Transfer Act (15 U.S.C.
1693h) is amended by adding at the end the following new
subsection:
``(d) Exception for Damaged Notices.--If the notice
required to be posted pursuant to section 904(d)(3)(B)(i) by
an automated teller machine operator has been posted by such
operator in compliance with such section and the notice is
subsequently removed, damaged, or altered by any person other
than the operator of the automated teller machine, the
operator shall have no liability under this section for
failure to comply with section 904(d)(3)(B)(i).''.
Mr. SCHUMER. Mr. President, I very much appreciate the chairman from
Texas accepting the amendment, which he has told me he will do, and I
believe he mentioned it on the floor.
This important amendment involves, very simply, disclosure on ATM
machines of fees. As many may know, on April 1, 1996, Visa and
MasterCard, which run the largest ATM networks in the United States,
ended their prohibition against surcharging ATM users. Before that,
there could not be a second surcharge. This fee was in addition to any
fee already imposed on a transaction from other bank customer
withdrawals.
Three years later, 93 percent of all banks are imposing ATM
surcharges on customers. That is 31 percent more than last year. The
bigger the bank, the more likely they are to surcharge and at a higher
rate. What this means is, if you have a BankAmerica card and you go to
a Bank One machine, you will pay two fees, one to the Bank One
machine--which everyone expects to pay--and the other to the
BankAmerica card. People are paying two fees. It is very difficult to
figure out what they are.
When the banks first started charging these fees, many of them didn't
bother to tell their customers they would be charged. They had to
figure it out by looking at the monthly statement. For anyone who has
looked at their monthly bank statements and all the fine print, it is
clear that the fees were not transparent. So, unsurprisingly, there was
an outcry. I took to the House floor, when I was in that body, to show
that banks were not disclosing these fees. I remember surveying the
banks in New York City and finding out they were not disclosing them.
[[Page S4848]]
So what we are proposing to do here is to rectify that wrong. This
amendment is in the great traditions of Adam Smith, pure capitalism.
Some have said we ought to eliminate the fees. Some have said we ought
to cap the fees. My view is to let the free market prevail. Let people
see what the fee is before they enter into the transaction and then
they can make a decision. That is the way it ought to work in
capitalism, in free market enterprise. So that is what this amendment
does.
Last year, a record $124 billion was generated in all-fee income.
That is up 18 percent in 1 year from banks. The fees are going up. This
amendment will not take away a penny of that, except from knowing
consumers who decide not to enter into this transaction. We must do
this. Awhile ago we forewent this amendment because most banks promised
they were not going to impose surcharges, and to their credit for a few
years they did not. But now they all do. It is time we have disclosure
so when they say that they will always disclose, because some do it
voluntarily, I simply say, ``trust but verify.''
This is a simple, straightforward, reasonable, balanced amendment. I
hope it will pass without hesitation.
Mr. President, I yield my time. Is someone available to just accept
it?
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, the Senator from Texas is unable to be
here. He has been gone for a couple of minutes. I am aware of his
willingness to accept the amendment, and there is no objection on our
side. I indicate that on behalf of Senator Gramm.
THE PRESIDING OFFICER. If there be no further debate, the question is
on agreeing to the amendment.
The amendment (No. 314) was agreed to.
Mr. SCHUMER. Mr. President, I move to reconsider the vote.
Mr. DOMENICI. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. DOMENICI. Mr. President, I ask consent I be permitted to speak
for 7 minutes in morning business.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DOMENICI. I thank the Chair.
(The remarks of Mr. Domenici and Mr. Dodd pertaining to the
introduction of S. Res. 98 are located in today's Record under
``Statements on Introduced Bills and Joint Resolutions.'')
The PRESIDING OFFICER. The Senator from Ohio.
Mr. VOINOVICH. Thank you, Mr. President. I thank the Chair and I
thank the Senator from Texas for letting me talk about the tragic death
of two great Americans.
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