New York City Close to Mandating Toughest ATM Safety Rules in U.S
Barthel, Matt, American Banker
New York City is close to passing the nation's strictest ATM security law, requiring banks to spend millions of dollars on systems and renovations.
The measure, likely to be put to a City Council vote in February, mandates that financial institutions install a surveillance camera and video recorder at every automated teller machine.
Ban on New Outdoor Machines
It also sets lighting and visibility standards for ATM sites, sets rules for customer access to the enclosures, and prohibits banks from installing any new outdoor machines.
While the legislation would apply only to New York City, it is being touted as a model for other urban areas where ATM crime has become a problem.
"This law is a fait accompli," said Stephen S. Cole, president of the Cash Station ATM network in Chicago. "Even if [the banks] succeed in watering it down a bit, it still promises to be the most severe legislation [of its kind] the industry has seen."
"We've got the votes to pass it the first time around," said New York council member Ronnie M. Eldridge, the main sponsor of the bill. She said she expected no delays in adopting the legislation.
If the bill passes, New York ATM owners will have 180 days to comply.
Big Banks Displeased
Representatives of New York's largest banks have expressed extreme displeasure at the bill, saying there is no body of evidence to suggest that the security measures the law would require are effective in reducing crimes in and around ATMs.
Rather than complain directly to the council members, Chase Manhattan Corp., Citicorp, Chemical Banking Corp., and others with sizable numbers of cash machines have instead empowered their state bankers' association and the NYCE shared ATM network, among other groups, to lobby legislators on their behalf.
The bill is "a disaster in its existing form," according David L. Glass, general counsel at the New York State Bankers Association. "But it's probably not going to go away entirely, so we are doing our best to modify it."
Based on the precedent of a 1989 movement to pass a similar law in Chicago - a law that never came to be - New York banks assumed that the City Council will allow for the formation of a task force to study the effectiveness of each proposed security measure. …