ATM Trade Groups Work Together in Push for Bank Access

Two ATM trade groups said Monday they are working together to assure their members get access to banking services in what the associations believe is a risk-averse financial climate.

The National ATM Council Inc. and the ATM Industry Association said they signed a memorandum of understanding to jointly develop a campaign to stop bank-account closures and the denial of new requests for banking services from their members, many of whom are ATM independent sales organizations and retail ATM deployers. The problems arose “in the aftermath of the government’s now-defunct Operation Choke Point program,” NAC and ATMIA said in a joint press release.

Operation Choke Point was a highly controversial program of the U.S. Justice Department during the Obama Administration that also involved federal banking regulators. Its intent was to stop fraudulent telemarketers, narcotics trafficking, and other illegal activity by denying banking services, including payment card acceptance, to suspect merchants. But critics said the program evolved into a campaign against legal but disfavored industries considered to be high-risk, including gun shops, payday lenders, certain online merchants, and others.

While a Trump Administration official declared Operation Choke Point dead in August 2017, its spirit apparently lives on in the banking industry. NAC and ATMIA say many banks regard their members as money-services businesses, a classification with specific licensure and other requirements. Without meeting those conditions, an ATM ISO could find itself unable to get banking services, or lose whatever service it already has.

Only 10% of ATMIA members who responded to a recent association survey “indicated that they have not had an account closure,” David N. Tente, Sioux Falls, S.D.-based ATMIA’s executive director for the U.S. and Americas, tells Digital Transactions News by email. Completed in January, the survey generated 113 responses.

“However, it is reasonable to assume that there are some out there who have not had an account closed—and have little motivation to respond to a survey on account closures,” he says. “Twenty-nine percent of our respondents said the reason given for their account closure was their being classified as an MSB—which is about half of those who were given a reason. Sixty-four percent were not given a reason.”

Bruce Wayne Renard, executive director at the Jacksonville, Fla.-based NAC, says “thousands of ATM operator bank accounts closed over the last several years.”

“Very early on the banks were indicating the reason being that these were money-service businesses ,” Renard tells Digital Transactions News in an email. “However, in recent times the banks have stopped giving reasons for the account closures, and have indicated this is confidential and they don’t need to say why.”

NAC and ATMIA will work to educate financial institutions and banking regulators about their businesses, as well as learn more from their members about their bank relations.

ATMIA in 2017 claimed its members were still feeling Operation Choke Point’s effects.