Topic: Automated Teller Machines (ATMs)
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Our customer claims that an individual forced them to make an ATM transaction and debit card purchases at three stores. Our customer said the individual claimed they had just been released from prison and lifted their shirt to reveal gunshot wounds. However, our customer did not mention that the individual had a weapon. Was our customer actually “forced” to make these transactions, and would they be considered unauthorized under Regulation E? Our customer said they were going to file a police report, but we have not seen it.
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In our view, the debit card transactions that occurred at the stores would not be considered “unauthorized transactions” under Regulation E, regardless of whether your customer was forced to make them. Conversely, an ATM transaction “induced by force” would be considered unauthorized under Regulation E. Whether your customer’s ATM transaction was “induced by force” is…
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Does the Illinois Electronic Fund Transfer Act (EFTA) require that the logos of the ATM networks we participate in be included on our ATMs?
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No, we do not believe that the Illinois EFTA requires you to place the logos of the networks you participate in on your ATMs, provided that you are in compliance with the federal EFTA requirements. However, the networks themselves may require such signage as part of your agreements with them. The Illinois EFTA contains a…
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Is there an Illinois law requiring signage on ATMs regarding the networks in which a bank participates? If so, what are the requirements?
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We are not aware of any Illinois law or regulation requiring signage on ATMs indicating the networks in which a bank participates. However, the networks themselves may require such signage as part of your agreement with them. For example, the Mastercard Rules provide that the “Mastercard, Maestro, and Cirrus Marks must be displayed on an…
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Do you have an example or template of a request for exceptive relief that we can use to request relief from FinCEN for backfiling Currency Transaction Reports (CTRs) involving Thillens (a registered money services business) replenishing our ATMs? FinCEN stated to us that we need to send in a specific request for exceptive relief from backfiling CTRs on these transactions. Additionally, may I share this letter with other individuals?
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A member of our Compliance Division Advisory Committee received a sample letter to FinCEN from Thillens for the purposes of requesting exceptive relief from backfiling CTRs related to their transactions with Thillens. If you choose to use it as a template, we recommend reviewing it carefully, as not all information may pertain to your bank.…
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A potential customer would like to open a deposit account with our bank to accept deposits made at a Bitcoin ATM that they own. We believe the customer is a money services business (MSB), and it would use a security service (like Garda or Brinks) to pick up the cash from the Bitcoin ATM and count the funds, which would then be sent to the customer’s account at our bank via ACH. Funds would flow out of the account by ACH transfer to a Bitcoin exchange. What BSA/AML concerns should we be aware of when considering whether to do business with this customer?
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We believe your bank should confirm that the customer is registered as an MSB and is licensed as a money transmitter under Illinois law and review the BSA/AML requirements for providing banking services to MSBs generally, as well as federal and state guidance on MSBs that transmit convertible virtual currency (CVC) such as Bitcoin. The…
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We have a potential client that would like us to finance the purchase of a Bitcoin ATM. We would not process any transactions for the client through our system, since they do not have a deposit account with us, and our client will engage a third party money services business (MSB) to do all of the actual payment processing associated with the Bitcoin ATM. Under the Bank Secrecy Act (BSA), what type of monitoring would be required for this client, and would the answer change if we begin a deposit relationship with the client?
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We do not believe that lending funds to a borrower for the purpose of purchasing a Bitcoin ATM would require your bank to perform the BSA-related due diligence required for an MSB, unless your customer is an agent of the MSB doing the actual payment processing for the Bitcoin ATM. Whether your bank’s lending relationship…
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We issue Mastercard debit cards and want to know if we can set the purchase limit to zero on some cards, effectively making them ATM cards. We have some customers who only have savings accounts, and if we issue debit cards for these accounts, the customers may use them for purchases and exceed the monthly six-transaction limit.
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We recommend reviewing the terms of your agreement with Mastercard to determine if this is allowable. The publicly available Mastercard Transaction Processing Rules indicate that transaction limits must be set at or above Mastercard’s default limits, which may be found in the Stand-In Processing—Accumulative Global Parameters (Form 041f). Consequently, you may be prohibited from decreasing…
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As a promotion at a new facility, we would like to fill the $20 canister in the ATM with a random number of $50 bills. The promotion would be open to anyone with an electronic device card who accesses the ATM, and we would publish rules disclosing the ATM fees (including a withdrawal fee charged only to noncustomers). Would this promotion be considered an illegal lottery?
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No, we do not believe that this promotion would be considered an illegal bank lottery. Under federal law, banks are generally prohibited from dealing in lottery-related activities (other than savings promotion raffles) where participants advance money or credit in exchange for the possibility of winning more than the amounts advanced. We do not believe that…
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Due to renovations of our main office, we will be reducing the number of ATMs in our parking lot from two to one. Do we need to notify the Illinois Department of Financial and Professional Regulation (IDFPR) and/or the FDIC? Are we correct that an ATM is not considered a bank branch subject to branch closing procedures?
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Yes, you are correct that an automated teller machine (ATM) is not a bank branch. Further, we are not aware of any requirement to notify the IDFPR or your primary federal regulator when you remove an ATM. For resources related to our guidance, please see: Federal Deposit Insurance Act, 12 USC 1813(o) (“The term ‘domestic…
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We recently changed our cutoff time for deposits made into our ATMs from 2:00 to 6:00 p.m. Are we required to send disclosures of the change to our impacted customers within thirty days of the change taking effect?
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We believe that notice is required of an extended ATM deposit cutoff time, assuming that the change in the cutoff time will result in expedited availability of deposited funds. Regulation CC requires notification to customers of a change that expedites the availability of funds no later than thirty days after implementation of the change. If…