Legislature(2017 - 2018)BARNES 124
02/28/2018 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB341 | |
| HB350 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 341 | TELECONFERENCED | |
| *+ | HB 350 | TELECONFERENCED | |
| += | HB 277 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 350-AUTOMATED TELLER MACHINES: FEES
3:25:08 PM
CHAIR KITO announced that the final order of business would be
HOUSE BILL NO. 350, "An Act relating to certain fees for using
an automated teller machine."
3:25:37 PM
REPRESENTATIVE ORTIZ, Alaska State Legislature, presented HB 350
as prime sponsor. He paraphrased the sponsor statement
[included in committee packet] which reads as follows [original
punctuation provided]:
The intent of this bill is to allow retail automatic
teller machines (ATMs) to charge a withdraw fee on
transactions made by international bank card holders.
Currently, there is no legal requirement for
independently owned ATMs to charge a fee on
transactions made by international card holders. Our
current law only pertains to ATMs owned by state-
sponsored banks or credit unions, and does not include
retail and individually owned ATMs. Because of this
gap, retail ATMs cannot charge a withdraw fee on
transactions from bank cards outside of the United
States.
Alaska welcomes millions of visitors each year, with a
large percentage of those visitors from out of the
country. In the summer of 2016 alone, nearly 300,000
international visitors came to Alaska. Retail ATM
owners cannot charge fees on these tourists'
transactions. Often, in order to make up for that lost
revenue, they increase their fee for those who do pay
the surcharge fee, which leads to domestic card users
paying a higher fee than international card users.
Multiple other state's have already passed laws to
close this gap and allow retail ATM owners to charge a
transaction fee to international card holders.
REPRESENTATIVE ORTIZ stated that the committee has a support
letter from the National ATM Council and that there is no
opposition from the local sponsored banks like Wells Fargo and
similar institutions.
3:27:39 PM
REPRESENTATIVE KNOPP referenced a line in the sponsor statement
regarding the lack of a requirement to charge a fee and asked
whether there is a prohibition currently against [the fee].
REPRESENTATIVE ORTIZ shared his understanding that single ATM
owners that are not affiliated with banks cannot charge fees to
international card holders.
REPRESENTATIVE KNOPP surmised that when the law was created, it
stated a state-sponsored credit union ATM is okay but retail and
private ATMs are not. He asked why the law would have been
crafted in a such a way.
REPRESENTATIVE ORTIZ deferred to his staff, Ms. Hamp, to address
the question.
3:29:07 PM
CAROLINE HAMP, Staff, Representative Dan Ortiz, Alaska State
Legislature, answered questions in the hearing on HB 350. She
stated that when the statutes were written, retail ATMs did not
exist. She said the gap in the law was not meant to harm future
endeavors for retail ATMs.
3:29:33 PM
REPRESENTATIVE BIRCH asked if ATM owners could reject an
international card. He gave an example of an ATM found at a bar
or grocery store.
3:30:22 PM
REPRESENTATIVE ORTIZ asked whether Representative Birch was
asking if it is within the rights of a bar owner not to accept
the card.
REPRESENTATIVE BIRCH stated that if a customer didn't pay for a
service, then the business could reserve the right to deny
services.
REPRESENTATIVE ORTIZ suggested that would force the customer in
the bar to find another location. He added that the proposed
bill would allow that bar owner to profit from an international
visitor that might want to use their card in his bar.
3:31:52 PM
REPRESENTATIVE WOOL declared a conflict of interest because he
owns a private ATM. He shared experiences with customers that
used his ATM and stated he did not know what kind of card they
used and whether they got processed or not. He said if the
international cards are getting rejected, he would like that to
change and if they aren't getting charged he'd like them to get
charged.
REPRESENTATIVE ORTIZ stated he appreciated Representative Wool's
honesty.
3:33:15 PM
REPRESENTATIVE SULLIVAN-LEONARD suggested that an international
tourist visiting Alaska would be charged the transaction and
would also be charged a fee from their bank.
REPRESENTATIVE ORTIZ opined that a seasoned traveler would be
aware of bank charges. He said when he travels he knows that
there is a charge that goes to the individual owner and a charge
that goes to the bank. He stated travelers don't have to use a
particular bank machine and can go to another location.
REPRESENTATIVE SULLIVAN-LEONARD stated it would be a convenience
aspect that any business that has a private ATM would want to
bestow upon anyone visiting that establishment. She asked how
many states already have similar legislation in place.
Ms. HAMP stated they had heard from the National Council of ATMs
that Alaska is the last state to have the gap.
REPRESENTATIVE ORTIZ pointed to a letter from the National ATM
Council stating, "To our knowledge, Alaska is the only state
left with this unintentional restriction in it's state law."
3:36:55 PM
CHAIR KITO asked whether there are restrictions in either state
or federal law that prohibit this action.
KRISTY NAYLOR, Acting Director, Division of Banking and
Securities, Department of Commerce, Community, & Economic
Development (DCCED), testified during the discussion of HB 350.
She said the division hasn't been able to find anything in state
law that prohibits this type of fee being charged. She added
that the proposed bill would be part of Title 6 which the
division oversees, and the division only has jurisdiction over
state-chartered financial institutions such as banks and credit
unions. She stated it doesn't extend over to federal
institutions such as Wells Fargo or federal credit unions, it
wouldn't extend over private ATM owners or private citizens.
CHAIR KITO asked for clarification that the state rules are not
in a position to provide any regulations over a private ATM or a
federal banking institution.
MS. NAYLOR answered those facilities are not in the banking code
and that the state doesn't have jurisdiction over federal banks
or private citizens.
3:38:27 PM
REPRESENTATIVE SULLIVAN-LEONARD asked if the legislature would
want to put restrictions around the proposed bill. She
suggested a tourist using an international card at a private ATM
shouldn't be charged 20 dollars per transaction.
MS. NAYLOR said state law on state financial institutions
briefly addresses ATMs. She stated that there are statutes for
credit unions and banks, but the language does not address
whether a fee should be one dollar or ten dollars. She added
restrictions would require the state to oversee that type of
program and keep track of all ATMs and related fees. It would
be a new oversight the department does not currently have.
3:40:10 PM
REPRESENTATIVE ORTIZ stated it would be an issue that the
legislature could trust the market to manage. He suggested if
the fee has to be disclosed, cardholders are going to recognize
the price is a lot higher than they would normally pay and could
use another machine with a lower fee.
3:40:52 PM
CHAIR KITO said he has used private ATMs where he was not within
walking distance of another ATM that may have charged lower
fees.
3:41:18 PM
REPRESENTATIVE WOOL surmised there is a standard fee regardless
of whether the card is foreign or domestic. He said he does not
think there is a different fee schedule.
3:42:11 PM
REPRESENTATIVE JOSEPHSON stated that if there is no difference,
it suggests that the state is not currently complying with some
requirement.
3:42:33 PM
REPRESENTATIVE ORTIZ stated that this issue was brought forth by
a constituent who is an individual ATM owner. He had been
informed that on international transactions there is no fee that
they can collect. He added that if an international traveler
goes into a Wells Fargo they do pay a fee. Individual owners
are losing out on fees they could have collected.
REPRESENTATIVE JOSEPHSON stated the fiscal note says, "The
Division of Banking and Securities does not currently regulate
ATM fees." He asked who regulates ATM fees.
REPRESENTATIVE ORTIZ deferred to Ms. Naylor.
3:44:17 PM
CHAIR KITO reiterated Representative Josephson's question.
MS. NAYLOR stated there may be federal law that pertains to the
state banks as well as the federal banks, but as far as private
citizens are concerned, she is not aware of anybody that
regulates them.
REPRESENTATIVE JOSEPHSON surmised that the cardholder would go
to the business owner in the event of an issue with the ATM.
MS. NAYLOR stated that would be her assumption as well.
REPRESENTATIVE KNOPP stated that he reached out to a friend that
owns a private ATM who had said he doesn't see any card that
goes into the machine and he think that there is a fee being
assess but not sure if it's being paid. He asked whether the
processing center would be the only party to know whether the
card is international.
3:46:11 PM
REPRESENTATIVE WOOL shared his experience with an ATM he owns.
The customers are charged a fee, and at the end of the month, he
receives checks from the processing company on the number of
transactions. He said he doesn't know which bank the cardholder
used; the transactions aren't itemized. He surmised there is
probably a report he could print out but as far as he knows he
gets a flat fee for each transaction. He suggested cardholders
are getting charged twice; once by the ATM owner and another
time by the bank.
3:47:13 PM
CHAIR KITO opened public testimony on HB 350. He stated he
would leave public testimony open.
CHAIR KITO held over HB 350.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB350 Sectional Analysis ver A 2.19.18.pdf |
HL&C 2/28/2018 3:15:00 PM |
HB 350 |
| HB350 Sponsor Statement 2.19.18.pdf |
HL&C 2/28/2018 3:15:00 PM |
HB 350 |
| HB350 ver A 2.19.18.PDF |
HL&C 2/28/2018 3:15:00 PM |
HB 350 |
| HB350 Fiscal Note DCCED-DBS 2.23.18.pdf |
HL&C 2/28/2018 3:15:00 PM |
HB 350 |
| HB277 Supporting Document-Fast Facts for Conservatives on Net Neutrality 2.12.18.pdf |
HL&C 2/28/2018 3:15:00 PM |
HB 277 |
| HB277 Opposition Documents 2.13.18.pdf |
HL&C 2/28/2018 3:15:00 PM |
HB 277 |
| HB277 Opposition Letters 2.17.18.pdf |
HL&C 2/28/2018 3:15:00 PM |
HB 277 |
| HB277 Supporting Documents-Letters of Support 2.9.18.pdf |
HL&C 2/28/2018 3:15:00 PM |
HB 277 |
| HB277 Opposition Documents 2.13.18.pdf |
HL&C 2/28/2018 3:15:00 PM |
HB 277 |
| HB350 Fiscal Note DCCED-DBS 2.23.18.pdf |
HL&C 2/28/2018 3:15:00 PM |
HB 350 |
| HB350 Sponsor Statement 2.19.18.pdf |
HL&C 2/28/2018 3:15:00 PM |
HB 350 |
| HB350 Support Letters 2.27.18.pdf |
HL&C 2/28/2018 3:15:00 PM |
HB 350 |