Connecticut was one of two states that prohibited ATM surcharges. The state’s ban was the result of an administrative order issued by Banking Commissioner John Burke in 1995. He concluded that the state’s 1975 electronic funds transfer (EFT) law implicitly prohibits surcharges, although it does not mention the fees directly. His interpretation was challenged in 1997 by two national banks, First Union and FleetBoston Financial (FleetBoston is the result of a 1999 merger between Fleet bank and BankBoston). In December 1999, the Connecticut Supreme Court overturned Burke’s order as an invalid interpretation of existing state law. The Court noted, however, that the state legislature did have the legal authority to ban surcharges. The state legislature considered but did not pass proposals to reinstate the ban in 2000.
For more on the OCC’s long history of aggressive attacks on state banking laws, see Rogue Agencies Gut State Banking Laws.
John P. Burke, Commissioner
STATE OE CONNECTICUT
DEPARTMENT OF BANKING
260 CONSTITUTION PLAZA
HARTFORD, CT 06103
September 14, 1995
This is in response to your letter dated August 1, 1995, concerning the permissibility of certain automated teller machine “ATM” transaction fees. Specifically, you seek confirmation of your interpretation that a state-chartered bank permissibly may charge a direct transaction fee for the use of such bank’s ATM by a person who does not otherwise maintain a banking relationship with the bank. The imposition of such transaction fees would permit a bank to recoup a portion of the expenses incurred by the bank to establish and maintain the ATM. You also seek the concurrence of this department that the Connecticut statutes governing the use of ATMs in Connecticut would not place any restriction on the ability of a federally-chartered bank in Connecticut to impose similar fees, provided it was authorized to do so under federal law. You state that any such transaction fees to be imgased would be disclosed to the user of the ATM either on a sign posted on the ATM or in clear view of the customer using the ATM or electronically during the course of the transaction in a manner that would permit a user to cancel the transaction without incurring the transaction fee.
The Connecticut statutes governing the establishment and use of ATMs do not authorize banks to impose the transaction fees described above. Moreover, Section 36a-156 of the Connecticut General Statutes specifically authorizes a bank that has established an ATM to impose a usage fee on other banks whose customers use the ATM to cover “a reasonably proportionate share of all acquisition installation and operating costs.” It is an established rule of statutory construction that a statute which provides that a thing shall be done in a certain way carries with it an implied prohibition against doing that thing in another way. See, State ex rel. Barlow v. Kaminsky, 144 Conn. 612 (1957). Therefore, Section 36a-156, which provides that a bank may charge another bank that uses its ATM a fee for such use, carries with it an implied prohibition against the bank imposing a fee on the customers of the other bank for such use. Accordingly, this department is unable to agree with your interpretation that a state-chartered bank in Connecticut may charge a direct transaction fee for the use of its ATM by the customer of another Bank or that the Connecticut statutes governing ATMs would not restrict the ability of federally-chartered banks in Connecticut to impose similar fees. A state-chartered or federally-chartered bank in Connecticut that wishes to recoup the expenses incurred in establishing and maintaining an ATM may do so by imposing the usage fee permitted under Section 36a-156 on other banks whose customers use the ATM.
Very truly yours,
John P. Burke