NAC 2025: ATM Regulations Update
As ATM technology advances, operators face increasing regulatory requirements. The ability to accept cash in addition to dispensing it creates more opportunities for ATMs, but more regulatory requirements as well. ATM operators need to comply with government regulations at both the state and federal levels.
During the recent NAC expo and conference at Caesars Palace in Las Vegas, Nancy Daniels, chief operating officer at Hyosung, provided an update on both pending and existing regulations, with a focus on how these regulations affect the independent ATM operator.
One of the most significant changes for many ATM operators is the need to register as a Money Service Business (MSB) with the Financial Crimes Enforcement Network, known as FinCen. As MSBs, they are required to follow anti-money laundering (AML) and know your customer (KYC) requirements, such as reporting suspicious activities. They may also need a money transfer license which is administered by the states.
“As our industry continues to evolve from simply dispensing of 20-dollar bills to acceptance of cash (we are learning) what that means in terms of how the government can potentially touch our industry,” Daniels said. “Once you’re involved in accepting cash, then the game changes quite a bit.”
In addition to these requirements, the Consumer Financial Protection Bureau (CFPB) requires ATM bill feed disclosures, while the National Credit Union Administration (NCUA) and the Office of the Comptroller of the Currency (OCC) have released rules for managing risks associated with independent ATMs.
Independent ATM operators are currently governed by numerous federal agencies, Daniels said, primarily the Bank Secrecy Act through FinCEN.
She cited 11 federal agencies and three state regulatory agencies that currently impact the ATM industry and presented a diagram showing each agency’s areas of responsibility and how some of these agencies’ responsibilities overlap. For example, the Federal Deposit Insurance Corporation oversees depository institutions and insurance companies, while the Bureau of Consumer Financial Protection oversees depository institutions and non-depository entities offering consumer financial products or services.
The 11 federal agencies include:
- Bureau of Consumer Financial Protection
- Commodity Futures Trading Commission
- Federal Deposit Insurance Corporation
- Federal Housing Finance Agency
- Financial Industry Regulatory Authority
- Federal Trade Commission
- Municipal Securities Rulemaking Board
- National Credit Union Administration
- National Futures Association
- Office of the Comptroller of the Currency
- Security and Exchange Commission
“All of these people can be directly involved, which creates a compliance nightmare for people in our industry,” she said.
Daniels reviewed three federal bills that directly impact the ATM industry: the Access to Banking Act (SB 401), the Safe Access to Cash Act (HR 1631) and The Payment Choice Act (HR 1138).
The Access to Banking Act, SB 401, ensures that ATM operators receive fair treatment for banking services. It places restrictions on payment card networks, banks and credit unions should they refuse to do business with an entity that complies with the law, according to congress.gov. Restrictions against these institutions include prohibiting the use of electronic funds transfer systems and lending programs, termination of the institution’s depository insurance and specific civil penalties.
ATM operators faced challenges receiving banking services following Operation Choke Point in 2013 which caused banks to terminate relationships with merchants categorized as having a “reputational risk,” according to the U.S. House of Representatives Committee on Oversight and Government Reform.
In December of 2013, the government issued more than 50 subpoenas to payment processors and banks. The investigation’s ostensible goal was to prevent mass market consumer fraud by terminating fraudsters’ access to payment systems, according to the committee. However, the committee stated in its report that there was evidence that Operation Choke Point’s real goal was to target industries categorized as “high-risk” by the Obama Administration.
The agency “regrettably classified our industry, basically ATM operators, along with pawn shops and pornographers, and it really resulted in the inability for a lot of people in this room to get bank accounts and so forth,” Daniels said.
The Access to Banking Act provides that being classified as an ATM operator ensures fair treatment.
The Safe Access to Cash Act ensures that if someone robs an ATM they get prosecuted under federal bank robbery enforcement laws and that the FBI gets involved.
Under existing law, the FBI gets involved if a bank-owned ATM gets robbed, but not a non-bank-owned ATM.
“Unfortunately, if it’s one of our ATMs, that’s a local crime,” Daniels said.
An attack against an ATM technician at an ATM on property outside a bank can presently be considered a local crime, but if the attack occurs at an ATM inside the bank it’s considered a federal crime. The Safe Access to Cash Act changes this.
The Payment Choice Act, HR1138, ensures a customer’s right to pay in U.S. currency. It requires retail businesses to accept cash as a form of payment for on-site sales of $500 or less. It also prohibits them from charging cash-paying customers more than customers not paying with cash, according to congress.gov.
“If somebody wants to pay in cash they have the right to use U.S. currency and pay in cash,” Daniels said.
Daniels described some of the other ways federal agencies affect the ATM industry.
The Secret Service addresses skimming and shimming, as well as finding counterfeit notes. It also provides ATM manufacturers the templates for currency.
The Office of the Comptroller of the Currency (OCC) is one of the most powerful agencies governing the ATMs, Daniels said. It can leverage fines against an institution for denying consumers access to cash, a scenario that can occur if an ATM network goes down.
The Bureau of Engraving and Printing will be impacting ATMs in the near future when a new 10-dollar bill is issued in 2026.
“The reason that impacts you is that inside your ATMs there is a little thing called a bill checker that actually recognizes whether that it’s a valid note or if it’s a counterfeit,” Daniels said. “Every one of those ATMs is going to need to be updated with new software to say ‘Hey, this what a 10-dollar note should look like.’”