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Senate advances ATM‑regulation bill after debate over transaction fees and state bank authority
Summary
The Utah Senate advanced second substitute House Bill 5, updating state law on automated teller operations to align with federal protections, require customer notice of transaction fees and impose a departmental notice requirement for relocations; senators warned state banks could impose intra‑network fees under the change.
Second substitute House Bill 5, which updates state law governing automated teller machines, advanced in the Utah Senate on Feb. 13 after advocates said it would align state rules with federal Regulation E and provide clearer consumer protections.
Senator Hilliard, who presented the bill, said the measure narrows the state's definition of covered electronic funds transfers, clarifies point‑of‑sale terminal operations for depository institutions, permits machine‑sharing arrangements and allows transaction fees so long as consumers receive on‑screen notice and can cancel the transaction without being charged. The bill also requires institutions to provide 30 days’ notice to the department before commencing, discontinuing or relocating ATM operations.
“...they will be notified before they're charged or before they confirm the transaction,” Hilliard said, describing the on‑screen notice as “a good protection.”
Several senators pressed Hilliard on whether banks could begin charging fees within their own networks; a colleague warned that, under the bill, a bank “could change that at any time.” Hilliard acknowledged that the law would permit state‑regulated banks to set such fees and that the issue may require future attention.
The motion to read the bill for a third time was called and the Senate recorded a roll‑call showing 23 aye votes, 0 nay and 6 absent. The bill was placed on the third‑reading calendar.
What happens next: HB5 now moves to the third‑reading calendar for final consideration; senators signaled the possibility of returning to outstanding scope issues — including whether definitions should encompass additional types of electronic banking — in a later session.
