Albany mulls non-bank ATM regulation

It's never been easier to get to your cash: Automated teller machines spit out money in bars, delis and street corners. But although bank ATMs are strictly regulated, there are few regulations on the non-bank variety, something that lawmakers want to change.

Legislation intended to enhance ATM customers' physical safety and financial security is now being considered in the state Assembly and Senate.

"We're looking to get some controls on those that are not already under control," said Sen. Carl Marcellino (R-Syosset). Marcellino is sponsoring the private automated-teller machine safety act in the Senate, a measure that Assemb. Jonathan Bing (D-Manhattan) has been trying to get enacted for years.

The legislation would require ATMs to be outfitted with mirrors so customers could see behind them and to have "adequate" lighting.

It would also register non-bank ATMs with the state, making them easier to trace if they're involved in fraud, identity theft or other crimes. Operators would have to register the machines' serial numbers and location and maintain records on each machine for state regulators, though the bill doesn't specify which records.

The ATMs also would have to display information identifying the machine's operator, owner of the property where it's located and a contact number for the state regulator.

"At least we'd know where they are," Marcellino said. "We'd know how many there are out there."

Marcellino said that the negotiations with manufacturers and the banking industry are ongoing. Manufacturers are concerned that the regulations, which include a $100 registration fee, would be onerous, he said. "We're trying to work out language that is fair to everybody," he said.

Houston-based Cardtronics, which supplies non-bank ATMs and various ATM services, was the nation's biggest owner of ATMs, the American Bankers Association reported last year. The company spent $48,000 lobbying the Legislature, governor and state banking department on various issues last year, including this legislation, according to state lobbying records. Cardtronics spokesman Nick Pappathopoulos declined to comment on the legislation or lobbying.

Michael Smith, president and chief executive officer of the New York Bankers Association, said it was talking to the bill's sponsors to make changes so the measure would not apply to bank ATMs that already have strict regulations.

"As it applies to non-bank ATMs, we understand and appreciate the intent of the sponsors," Smith said. "We do understand that this is something that should be addressed."

If there's a problem with atransaction, such as not getting a receipt, being overcharged or not getting the correct amount of money, consumers "should have both an owner or operator they could look to, as well as a regulator who could step in and act as their advocate," said Russ Haven, legislative counsel for the New York Public Interest Research Group.

"This is a huge and glaring loophole in federal and state law; we don't know who is operating all these non-bank ATMs," Haven said.

Nassau County already requires non-bank ATMs to be registered with its consumer affairs department, but Suffolk does not.