National ATM Council applauds update to BSA/AML examination manual

Dec. 10, 2021

The National ATM Council Inc. is applauding last week's decisive action by the Federal Financial Institutions Examination Council that updates and clarifies the FFIEC's BSA/AML Examination Manual section governing the banking of independent ATM businesses.

Independent ATM business owned by entrepreneurial ATM operators account for almost 60% of all ATMs currently in service throughout the United States. Their ATMs are often located in communities where there are no bank branches or bank ATMs close by.

"While we are still studying the details of the FFIEC's updates to the independent ATM section of its BSA/AML Examination Manual, on our initial review, the changes appear to be substantial, well founded, and very positive in terms of acknowledging that bank-sponsored independent ATM companies are not categorically high-risk accounts, despite the fact that we are, by definition, 'cash-intensive' businesses," said George Sarantopoulos, chief executive of Brooklyn, NY-based Access One Solutions and NAC's board chair.

"NAC has worked diligently for a number of years with Congress and the bank regulators, seeking restoration of reasonable access to essential banking services for our nation's independent ATM operators, and this latest FFIEC action appears to represent the fruits of that labor," Sarantopoulos added. "This is an exceptionally good thing, not only for the nation's independent ATM entrepreneurs, who require bank accounts to operate, but also for the millions of Americans who rely daily upon ATMs for convenient and essential access to cash."

Exam Manual origins

The FFIEC BSA/AML Examination Manual is used by all federal bank regulators as a primary guidance for auditing financial institutions to ensure compliance with the Bank Secrecy Act and other anti-money-laundering laws and related federal regulatory requirements governing financial institutions and financial crimes.

The exam manual also serves as a point of reference for state bank regulators. As a result, it provides practical guidance for banks and credit unions regarding what regulatory authorities expect of depository institutions that provide banking services to customers in the independent ATM industry.

"The prior version of the manual's section relating to independently owned ATMs mischaracterized our accounts as categorically at 'high risk' of 'money laundering and fraud,' which is an inaccurate mischaracterization that has served to wrongfully stigmatize this truly vital industry sector," explained NAC executive director Bruce Renard.

"All independent ATM operators must be sponsored by banks that are highly specialized and that require all applicants seeking sponsorship to be fully vetted and subjected to extensive background checks prior to entering the business and being allowed to connect their terminals to the ATM networks through which virtually all ATM transactions are conducted," Renard continued. "This rigorous and detailed oversight of ATM providers, for as long as they remain in business, ensures continuing protection against any potential misconduct. As such, ATM operators' vault-cash accounts are not categorically high-risk; and we are thankful that the latest updates to the FFIEC Exam Manual now unambiguously recognize this fact."

FFIEC and bipartisan support

"NAC's board of directors is excited to see the FFIEC manual updates, and we want to express our sincerest thanks and appreciation to FFIEC chairman Todd Harper and his FFIEC and NCUA staffs, along with the leadership and staffs of the other regulatory agencies represented on the FFIEC, for the thoughtful and diligent work they performed in updating this section of the Examination Manual," said Mike Powell, chair of NAC's governmental affairs committee and founder of Nashville, TN-based First Regents Bancservices.

"We especially appreciate the excellent bipartisan leadership, expertise, and resources brought to bear by senior House Members, Representatives Carolyn Maloney (D-NY) and Blaine Luetkemeyer (R-MO), that helped bring this issue, and the urgent need for corrective action, to the full attention of the FFIEC and its constituent agencies," Powell added.

"We also want to recognize and express sincere thanks to the other bipartisan Congressional leaders who addressed this critical issue with the bank regulators to encourage resolution: John Rose (R-TN), Tom Suozzi (D-NY), Barry Loudermilk, (R-GA), Donald Payne, Jr. (D-NJ), David Kustoff  (R-TN), Lee Zeldin (R-NY), Van Taylor (R-TX), and Josh Gottheimer (D-NJ).  Their collective bipartisan efforts made all the difference in gaining the focus and attention that led to the FFIEC's action. While there is still implementation work to be done, a solid foundation has now been laid for the path back to reasonable banking access for independent ATM operators."

Executive director Renard added, "It has taken a truly broad and diverse collection of independent ATM deployers and suppliers from across the US, working together diligently for years to have the federal government correct the prior mischaracterizations and stigma fostered by the former ATM-related provisions of the FFIEC Examination Manual. NAC and ATM Nation offer their heartfelt thanks and gratitude to these industry leaders for their dedication and perseverance that have led to this latest  FFIEC Examination Manual update."

More praise

Contributing valuable assistance to NAC in bringing this issue to the attention of Congress and the financial regulators were Danny Frank, executive director of the Greater New York Metro Regional ATM Association and Kenneth Goldberg, president of the Amusement and Music Owners Association of New York Inc.

Other organizations also working constructively and effectively in tandem with NAC to seek resolution of this vital issue included Consumer Action, the Consumer Federation of America, and the Amusement and Music Operators Association.


[Credit: Charles Thompson/Pixabay]
Cash Register Charles Thompson Pixabay 1885558 1920

Payment Choice Act of 2021 would make it illegal for merchants to reject cash payments

July 26, 2021
Reps. Donald M. Payne Jr. (D-NJ) and Chris Smith (R-NJ) introduced a bill this month to guard American currency as a universal form of payment for goods and services. The Payment...
[Logo: National ATM Council Inc.]
Nac Atm Operators Logo
Leasing, financing

OCC adopts final rule requiring large banks to provide fair access to financial services to operators

Feb. 18, 2021
National ATM Council commends Office of the Comptroller of the Currency for its new federal regulation