FINAL RULE--AMENDMENT TO REGULATION E.

The Board of Governors is amending 12 C.F.R. Part 205, its Regulation E, implementing the Electronic Fund Transfer Act. The revisions implement amendments to the act contained in the Gramm-Leach-Bliley Act that require the disclosure of certain fees associated with automated teller machine (ATM) transactions. The amendments require ATM operators that impose a fee for providing electronic fund transfer services to post a notice in a prominent and conspicuous location on or at the ATM. The operator must also disclose that a fee will be imposed and the amount of the fee, either on the screen of the machine or on a paper notice, before the consumer is committed to completing the transaction. In addition, when the consumer contracts for an electronic fund transfer service, financial institutions are required to provide initial disclosures, including a notice that a fee may be imposed for electronic fund transfers initiated at an ATM operated by another entity.

Effective March 9, 2001, 12 C.F.R. Part 205 is amended as follows:

Part 205--Electronic Fund Transfers (Regulation E)

1. The authority citation for Part 205 would continue to read as follows:

Authority: 15 U.S.C. 1693-1693r.

2. Section 205.7 is amended by adding a new paragraph (b)(11) to read as follows:

Section 205. 7--Initial disclosures.

(b) Content of disclosures.

(11) ATM fees. A notice that a fee may be imposed by an automated teller machine operator as defined in section 205.16(a)(1), when the consumer initiates an electronic fund transfer or makes a balance inquiry, and by any network used to complete the transaction.

3. A new section 205.16 is added to read as follows:

Section 205.16--Disclosures at automated teller machines.

(a) Definition. Automated teller machine operator means any person that operates an automated teller machine at which a consumer initiates an electronic fund transfer or a balance inquiry and that does not hold the account to or from which the transfer is made, or about which an inquiry is made.

(b) General. An automated teller machine operator that imposes a fee on a consumer for initiating an electronic fund transfer or a balance inquiry shall:

(1) Provide notice that a fee will be imposed for providing electronic fund transfer services or a balance inquiry; and

(2) Disclose the amount of the fee.

(c) Notice requirement. An automated teller machine operator must comply with the following:

(1) On the machine. Post the notice required by paragraph (b)(1) of this section in a prominent and conspicuous location on or at the automated teller machine; and

(2) Screen or paper notice. Provide the notice required by paragraphs (b)(1) and (b)(2) of this section either by showing it on the screen of the automated teller machine or by providing it on paper, before the consumer is committed to paying a fee.

(d) Temporary exemption. Through December 31, 2004, the notice requirement in paragraph (c)(2) of this section does not apply to any automated teller machine that lacks the technical capability to provide such information.

(e) Imposition of fee. An automated teller machine operator may impose a fee on a consumer for initiating an electronic fund transfer or a balance inquiry only if

(1) The consumer is provided the notices required under paragraph (c) of this section, and

(2) The consumer elects to continue the transaction or inquiry after receiving such notices.

4. Under Appendix A, A-2 is amended by adding a new paragraph (j) to read as follows:

Appendix A to Part 205--Model Disclosure Clauses and Forms

A-2-Model Clauses for Initial Disclosures (Section 205.7(B))

(j) ATM fees (section 205.7(b)(11)). When you use an ATM not owned by us, you may be charged a fee by the ATM operator [or any network used] (and you may be charged a fee for a balance inquiry even if you do not complete a fund transfer).

5. In Supplement I to Part 205, the following amendments would be made:

a. Under Section 205.7--Initial Disclosures, under Paragraph 7(b)(5)-Fees, paragraph 3. is revised;

b. Under Section 205.9-Receipts at Electronic Terminals; Periodic Statements, under Paragraph 9(a)(1)-Amount, paragraph 1. is revised and a new paragraph 2 is added; and

c. A new Section 205.16--Disclosures at Automated Teller Machines is added. The additions and revision read as follows:

Supplement I to Part 205--Official Staff Interpretations

Section 205. 7--Initial Disclosures

7(b) Content of Disclosures

Paragraph 7(b)(5)-Fees

3. Interchange system fees. Fees paid by the account-holding institution to the operator of a shared or interchange ATM system need not be disclosed, unless they are imposed on the consumer by the account-holding institution. Fees for use of an ATM that are debited directly from the consumer's account by an institution other than the account-holding institution (for example, fees included in the transfer amount) need not be disclosed. (See section 205.7(b)(11) for the general notice requirement regarding fees that may be imposed by ATM operators and by a network used to complete the transfer.)

Section 205.9--Receipts at Electronic Terminals; Periodic Statements

Paragraph 9(a)(1)-Amount

1. Disclosure of transaction fee. The required display of a fee amount on or at the terminal may be accomplished by displaying the fee on a sign at the terminal or on the terminal screen for a reasonable duration. Displaying the fee on a screen provides adequate notice, as long as a consumer is given the option to cancel the transaction after receiving notice of a fee. (See section 205.16 for the notice requirements applicable to ATM operators that impose a fee for providing EFT services.)

2. Relationship between section 205.9(a)(1) and section 205.16. The requirements of sections 205.9(a)(1) and 205.16 are similar but not identical.

i. Section 205.9(a)(1) requires that if the amount of the transfer as shown on the receipt will include the fee, then the fee must be disclosed either on a sign on or at the terminal, or on the terminal screen. Section 205.16 requires disclosure both on a sign on or at the terminal (in a prominent and conspicuous location) and on the terminal screen. Section 205.16 permits disclosure on a paper notice as an alternative to the on-screen disclosure.

ii. The disclosure of the fee on the receipt under section 205.9(a)(1) cannot be used to comply with the alternative paper disclosure procedure under section 205.16, if the receipt is provided at the completion of the transaction because, pursuant to the statute, the paper notice must be provided before the consumer is committed to paying the fee.

iii. Section 205.9(a)(1) applies to any type of electronic terminal as defined in Regulation E (for example, to POS terminals as well as to ATMs), while section 205.16 applies only to ATMs.

Section 205.16--Disclosures at Automated Teller Machines

16(b) General

Paragraph 16(b)(1)

1. Specific notices. An ATM operator that imposes a fee for a specific type of transaction such as a cash withdrawal, but not a balance inquiry, may provide a general statement that a fee will be imposed for providing EFT services or may specify the type of EFT for which a fee is imposed.