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Some Independent ATM Deployers (IADs) have run across challenges in rural areas with banks closing IAD bank accounts or not being willing to work with IADs in the first place. There is, however, good news on this front.

New Ruling from FFIEC

The Federal Financial Institutions Examination Council (FFIEC) has been looking at the issue of the IAD’s role in supplying cash to rural communities who otherwise might not have easy access to cash. In one of the FFIEC’s previous manuals, language was used that may have been interpreted in a way that discouraged banks from working with IADs. 

After working with ATM industry groups, the FFIEC has revised a section of its manual to better explain a bank’s possible collaboration with IADs and put that relationship in a better light. The updated language states that:

  • financial institutions are “neither prohibited nor discouraged from providing banking services to independent ATM owner or operator customers…”
  • an operator that maintains a separate cash settlement account with the bank for its ATMs presents a lower risk of money laundering, terrorist financing, or other illicit financial activity “because the bank knows the source of funds and can compare the volume of cash usage to EFT settlements to identify suspicious activity.”

Given the importance of providing easy access to cash in areas of the country where brick and mortar banks are not in plentiful supply, this small change to the FFIEC’s manual may have a big impact on the communities IADs often serve.