Legislation sponsored by Assembly Democrats L. Grace Spencer and Benjie E. Wimberly to help ensure that New Jersey residents do not fall victim to repeated unfair ATM charges was advanced by an Assembly panel on Monday.
The bill (A-1575) would prohibit third-party organizations from operating a privately-owned ATM in New Jersey unless the machine provides consumers with an option to withdraw funds in $20 increments up to $200 per transaction, in addition to any other withdrawal amounts that may be offered as options.
While ATMs operated by chartered institutions are required to allow consumers to withdraw funds in increments of $20 up to $200 or more in a single transaction, some non-bank ATMs have lower maximum withdrawal limits, which may result in service fees and surcharges, Spencer noted.
“Oftentimes, the ATM at a convenience store or other local establishment, usually located in a neighborhood underserved by banks, will limit how much someone can withdraw in a single transaction, forcing people to withdraw cash multiple times and thus face multiple fees and surcharges for trying to access even relatively small amounts of their own money,” said Spencer (D-Essex). “This legislation simply will align regulations for minimum withdrawals with what’s required at bank ATMs and eliminate a common predatory practice.”
The bill, which would establish a civil penalty of up to $1,000 per day for failure to comply with its provisions, provides for enforcement by the Commissioner of Banking and Insurance.
“In some neighborhoods, the ATM at the local corner store or the check cashing place may be the only ATM for miles, and the cost of using it to withdraw money when there’s no other option is almost like a penalty for being poor,” said Wimberly (D-Bergen/Passaic). “By implementing the same standards that are already in place for federally chartered banks and credit unions, this bill will protect vulnerable New Jersey residents who routinely are taken advantage of because they don’t have access to a bank’s ATM.”
The legislation was advanced by the Assembly Financial Institutions and Insurance Committee.