ATM Regulations for Independent Operators Explained NAC 2025

Nancy Daniels of Hyosung describes evolving ATM regulations.

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NAC 2025: Regulatory update

As ATM technology advances, operators face increasing regulatory requirements. In particular, the ability to accept cash in addition to dispensing it creates more opportunities for ATMs, but more regulatory requirements as well.

Nancy Daniels, COO of Hyosung, an ATM manufacturer, offered an overview of the expanding regulatory requirements for independent ATMs during the recent NAC expo and conference in Las Vegas. Daniels has been active with the NAC’s regulatory initiatives.

Independent ATM operators are governed by numerous federal agencies, Daniels said, primarily the Bank Secrecy Act through the Financial Crimes Enforcement Network (FinCEN).

One of the most important changes of late is that independent ATM operators can be classified as a Money Service Business (MSB), requiring them to register with FinCEN. As MSBs, they are required to follow anti-money laundering (AML) and know your customer (KYC) requirements, such as reporting suspicious activities.

Cash acceptance changes the game

“Once you’re involved in accepting cash, then the game changes quite a bit,” Daniels said. In accepting cash, an organization becomes classified as an MSB. which requires additional licensing. There is also a need for 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.

In addition, the Consumer Financial Protection Bureau (CFPB) requires bill feed disclosures for ATMs, while the Office of the Comptroller of the Currency (OCC) and the National Credit Union Administration (NCUA) have issued rules for managing risks associated with managing independent ATMs.

Multiple governing agencies

There are currently 11 federal agencies that impact the ATM industry, Daniels noted:

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 focused on three federal bills NAC has been working on that directly impact the ATM industry: the Safe Access to Cash Act (HR 1631), the Fair Access to Banking Act (SB 401), and The Payment Choice Act (HR 1138).

Safe Access to Cash Act

The Safe Access to Cash Act is designed to change bank robbery enforcement laws to ensure that if someone robs an ATM they get prosecuted under bank robbery enforcement laws and that the FBI gets involved.

Under existing law, if a bank-owned ATM gets robbed, the FBI gets involved, but not for a non-bank-owned ATM.

“Unfortunately, if it’s one of our ATMs, that’s a local crime,” she said.

An attack against an ATM technician at an ATM on property outside a bank can be currently considered a local crime, she said, but if the crime occurred at an ATM inside the bank it’s considered a federal crime.

“It’s really crazy,” she said, adding that The Safe Access to Cash Act changes this.

Fair Access to Banking Act

The Fair Access to Banking Act, SB 401, ensures ATM operators receive fair treatment for banking services. The bill places restrictions on certain banks, credit unions and payment card networks if they refuse to do business with a person who complies with the law, according to congress.gov. Restrictions include prohibiting the use of electronic funds transfer systems and lending programs, termination of an institution’s depository insurance and specified civil penalties.

ATM operators encountered issues receiving banking services after Operation Choke Point in 2013 forced banks to terminate relationships with merchants that created a “reputational risk,” according to the U.S. House of Representatives Committee on Oversight and Government Reform.

As of December 2013, the government issued more than 50 subpoenas to banks and payment processors. The ostensible goal of the investigation was to combat mass market consumer fraud by foreclosing fraudsters’ access to payment systems, according to the committee. However, the committee noted there was evidence that the true goal of Operation Choke Point was to target industries deemed “high-risk” or otherwise objectionable by the Obama Administration.

Daniels said 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.”

SB 401, provides that being classified as an ATM operator ensures fair treatment.

“Just because you’re classified as an ATM operator, you’re treated fairly,” Daniels said. “Many of you still have trouble getting bank accounts.”

Payment Choice Act

The Payment Choice Act, HR1138, ensures the right to pay in U.S. currency. The bill requires retail businesses to accept cash as a form of payment for on-site sales of $500 or less and prohibits them from charging cash-paying customers a higher price compared to 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 further elaborated on some of the ways the various federal agencies affect the ATM industry.

The Secret Service is responsible for addressing skimming and shimming, as well as finding counterfeit notes. The agency also provides ATM manufacturers the templates for currency.

Six months ago, Daniels said, the Secret Service conducted an operation in Las Vegas and found 300 skimmers.

The Office of the Comptroller of the Currency (OCC) is one of the most powerful agencies governing the ATM industry, Daniels noted. This agency can leverage fines against an institution for preventing consumers access to cash, which could happen if an ATM network goes down.

The Bureau of Engraving and Printing will also be impacting ATMs in the near future when it introduces a new 10-dollar bill designed to be 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,” she 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.’”

More Resources

Here are 10 useful links (guidelines, regulations, legal surveys, and industry best practices) on ATM / automated teller machine regulation and compliance:

CFPB — Disclosures at Automated Teller Machines (Regulation E / EFTA)
https://www.consumerfinance.gov/rules-policy/regulations/1005/16/
(Federal requirement for display of ATM fees and disclosures) Consumer Financial Protection Bureau
Federal Register — Final Rule: Disclosures at ATMs (Regulation E / EFTA amendment)
https://www.federalregister.gov/documents/2013/03/26/2013-06861/disclosures-at-automated-teller-machines-regulation-e
(Amendment to disclosure requirements) Federal Register
FinCEN — MSB / ATM Guidance (PDF)
https://www.fincen.gov/sites/default/files/shared/MSB-ATM-Guidance.pdf
(Guidance on whether ATM operators qualify as money services businesses, recordkeeping, AML obligations) FinCEN.gov
LexisNexis — ATM Regulations State Law Survey
https://www.lexisnexis.com/community/insights/legal/b/practical-guidance/posts/atm-regulations-state-law-survey
(Survey of U.S. state-level ATM regulation, fees, restrictions, disclosure laws) LexisNexis
ATMIA — Regulatory Monitoring / Industry Advocacy
https://www.atmia.com/advocacy/regulatory-monitoring/
(Tracks current and emerging regulations affecting the ATM industry) atmia.com
PCI Security Standards Council — ATM Security Guidelines (Info Supplement, PDF)
https://www.pcisecuritystandards.org/pdfs/PCI_ATM_Security_Guidelines_Info_Supplement.pdf
(Security best practices for ATM hardware / software to protect cardholder data) PCI Security Standards Council
ATM Depot — ATM Operating Rules & Regulations
https://atmdepot.com/articles/atm-operating-rules-and-regulations/
(Overview of major U.S. laws affecting ATM operators, including EFTA, Bank Protection Act) ATM Depot
ATA / ATM Marketplace — Compliance & Security in ATM Management
https://www.atmmarketplace.com/blogs/compliance-and-security-in-atm-management-whats-shaping-the-future/
(Recent trends in ATM regulatory pressure and security compliance) ATM Marketplace
ABA (American Bankers Association) — State Laws & Legislation Tracking
https://www.aba.com/advocacy/state-laws
(Includes state-level banking and ATM-related legislation, including security, placement, fees) ABA
“What’s the regulation roadmap look like for ATMs in 2024?” — ATM Marketplace Article
https://www.atmmarketplace.com/articles/whats-the-regulation-roadmap-look-like-for-atms-in-2024/
(Insight into evolving ATM regulatory expectations) ATM Marketplace

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ATM regulations expand with evolving technology