S.4858 by Senator Balboni

AN ACT to amend the general business law and the banking law,

in relation to enacting the private automated teller machine safety act

The New York Association of Convenience Stores is a private, not-for-profit trade association representing the interests of nearly 6,000 neighborhood mini-marts and convenience stores across the state, many of which offer ATM's as a convenience to their customers.

Some convenience store ATM's are owned by a local bank, or leased by the store from a private company. Many, however, are owned by the store itself, and these would fall under the onerous licensing and other provisions of this legislation.

The bill sets forth conflicting characterizations of such ATMs. One the one hand, it asserts that supermarket and convenience store ATM functions are “unrelated to banking activities.” On the other, it defines transaction as “the act of accessing an account at a financial institution with a credit card, debit card, or other bankcard at a private automated teller machine for the purpose of making cash withdrawals, balance inquiries, deposits, fund transfers from or to the account, or engaging in any other transaction.”

The sponsor would have us believe that all 27.3 million Americans reported by the Federal Trade Commission to have experienced identity theft over a 5-year period were New Yorkers who were victimized by ATMs in supermarkets and convenience stores. This is preposterous.

Whatever the actual extent of identity theft may be in New York State, we respectfully disagree with the sponsor that the solution is to require mom-and-pop stores to pay $100 a year now and $50 annually thereafter to the New York State Banking Department for the privilege of keeping the ATM machines they have been responsibly operating for the past 10 or 15 years.

The ATM marketplace already provides controls to guard against improper ATM use. Banks, service providers, and EFT networks all have their own standards for participation by non-bank-owned ATM locations. These entities should be able to fax a list of their approved ATM locations to the Department on a quarterly basis, negating the need to force every retail store in the state to register each of their machines individually.

If the concern is that a tiny number of unscrupulous individuals may be misusing ATMs to the detriment of consumers, this bill misses the mark by punishing the law-abiding majority of retailers in the form of excessive and burdensome regulations that the bad guys won't bother to comply with anyway.

Accordingly, we oppose passage of this legislation.

S.4858 by Senator Balboni

James S. Calvin

President, NYACS

May 22, 2005