Federal Laws Affecting ATM Businesses

Even if you are not a bank yourself, there are federal laws that you need to know about when you own and operate an ATM. There are different laws that apply, depending on whether the ATM is owned and operated by an individual or a bank. Many of the stringent security measures requiring video cameras are not necessary when the ATM is not located inside a financial institution, making it easier for an individual to own the machine.

The Electronic Fund Transfer Act and its regulations give protections to consumers who engage in electronic transactions, including ATMs. If an ATM is owned by an individual and not a bank, the machine cannot accept depositions under any circumstances. The machine’s function is strictly limited to dispensing cash only. In addition, there must be clear disclosure on the machine itself whether the customer’s card will be accepted by the machine.

ATMs owned by an individual may impose a surcharge on transactions. This fee is over and above what their financial institution charges. There must be two different disclosures of any ATM surcharge:

  • There must be a printed disclosure on the machine itself
  • The consumer must receive electronic notification of the fee before the transaction is completed and be given an opportunity to cancel the transaction.

Non-bank ATM owners are permitted under federal law. The owner must register with the local agency in their own state within 60 days after becoming the owner of an operating machine. In addition, the owner must file an annual notice of ownership with the state.

Call an Atlanta ATM/COAM Business Lawyer

Battleson Law LLC helps individuals and partnerships with regulatory compliance and business law issues pertaining to ATMs and COAMs. To learn what we can do, call us at 770.398.0720 or contact us online.


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