ATM Operators Praise a Proposed OCC Rule That Would Wipe Away Years-Old Regulatory Roadblocks

Independent ATM operators are lauding a proposed rulemaking from the federal Office of the Comptroller of the Currency they say would correct a history of denial of access to banking services for entrepreneurs that install and operate ATMs in retail stores and other locations.

Observers say the rulemaking, if adopted, could end years of strict scrutiny by the federal government of independent or non-bank financial-service companies that in some respects compete with banks. Advocates for the OCC proposal, which the agency released Friday, see it as freeing companies such as independent ATM operators to compete without what they regard as unfair restrictions, including roadblocks barring access to bank accounts.

“A 2013 [U.S. Department of Justice] initiative known as ‘Operation Choke Point’ was meant to reduce money-laundering risk in cash-intensive businesses but it came with unintended consequences that created many challenges for completely legitimate businesses in the cash industry, including many independent ATM deployers simply looking for basic business- operating accounts,” Sam M. Ditzion, chief executive of Boston-based Tremont Capital Group, an ATM-industry consulting firm, tells Digital Transactions News in an email message.

The proposed rulemaking, released Friday, refers to a wide range of entities that have been “targets” of initiatives such as Operation Choke Point, including “individuals, companies, organizations, and industries.” The Obama-era Operation Choke Point officially ended in 2018, but some observers say businesses are still feeling its effects. “It unfortunately created a very challenging environment for some independent ATM deployers to get their financial institutions to ‘bank’ them,” says Ditzion.

The National ATM Council Inc., a Jacksonville, Fla.-based trade group for independent ATM operators, celebrated the OCC’s proposed rulemaking. “Since 2013, independent ATM providers have encountered repeated roadblocks in maintaining reasonable access to the banking system, as growing numbers of our nation’s banks have closed the accounts of thousands of ATM businesses and refused to open new accounts, without providing any valid or rational basis for such actions. It has become all too clear that the largest national banks and a growing number of mid-sized and smaller banks have shunned our entire industry sector,” said Bruce Renard, the group’s executive director, in a statement released Sunday.

Independent ATM operators have for years negotiated with retailers to install machines in their stores to allow customers to access cash. But the service depends on the operators’ ability to establish and maintain bank accounts. “If you are an ATM provider and cannot obtain or keep a bank account, you’re out of business,” Renard says in his statement. “Yet, numerous companies and individuals in our industry across the country are continuing to have their bank accounts closed and new accounts denied, without any reason whatsoever, or simply because the business is an independent ATM company.”

In its release of the proposed rule, the OCC says, “[t]he proposal would apply to the largest banks in the country that may exert significant pricing power or influence over sectors of the national economy. The proposal would require a covered bank to ensure it makes its products and services available to all customers in the community it serves, based on consideration of quantitative, impartial, risk-based standards established by the bank.” A covered bank is one covered by the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010, which applies to institutions with $10 billion or more in assets.