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Senator GORTON. Our first panel consists of Mr. Mancusi, from the Comptroller of the Currency; and Mr. Malarkey, who is the State Bank Commissioner of Delaware but who is speaking on behalf of the Conference of State Bank Supervisors.
I note, gentlemen, that if all the witnesses were to read the testimony we have before us we would be here until 1 or 2 o'clock just listening to that reading. I assure that all of the members of the committee are literate and capable of reading them for themselves. I would appreciate your summarizing your statements and all of them will be included in the record in full as if read.
With that, Mr. Mancusi, you may proceed.
STATEMENT OF MICHAEL A. MANCUSI, SENIOR DEPUTY COMP
TROLLER FOR NATIONAL OPERATIONS, OFFICE OF THE COMPTROLLER OF THE CURRENCY
Mr. MANCUSI. Thank you, Mr. Chairman. In keeping with your request, I would like our statement entered into the record and I do have several brief comments that I would like to make that hopefully will summarize that statement.
[The complete statement follows:]
MICHAEL A. MANCUSI
UNITED STATES SENATE
SEPTEMBER 19, 1984
Mr. Chairman and members of the Committee, I appreciate the
opportunity to express the views of the Comptroller's Office on
The Banking Convenience Act of 1984.
do not necessarily represent the views of the Administration.
This bill would preserve the ability of national and state
member banks to participate in shared automated teller
machine (ATM) networks, and protect the widely-accepted
consumer benefits which are now placed in jeopardy because of
the recent district court decision in Independent Bankers
Association of New York State v. Marine Midland Bank.
s. 2898 provides that a shared ATM would not be considered
a branch of a national bank if the ATM is not owned or rented
by that bank.
Thus, it would preserve the status quo by
codifying the current interpretation of law that led to
national and state member bank participation in shared ATM
s. 2898 is a timely and important piece of
legislation which reverses the broad and harmful precedent set
in the Marine case.
Because of the importance of ATMs to
consumers, and because of the detrimental effect that the
Marine decision could have on ATM networks, I strongly support
s. 2898 and recommend its prompt passage.
Growth of ATM networks
As you know, in 1976, the District of Columbia Circuit
Court held in IBAA V. Smith that an ATM, which is owned or
rented by a national bank, is a branch of that bank, and
therefore restricted by applicable state branching laws. Consequently, the Comptroller interpreted the Circuit Court's
opinion to mean that ATMs that are not owned or rented by a
bank are not branches of that bank for purposes of the Federal
The practical effect of this reading is that if a
national bank provides customers access to an ATM network
established by other institutions by paying, for instance,
transaction fees, such access is not restricted by state
branching laws or the Federal prohibition on interstate
Relying on the 1976 IBAA decision, both national and state
member banks have been able to participate in the dramatic
growth of ATM networks.
In 1980, there were relatively few
Today, there are at least 200 regional networks,
seven of which operate nationwide.
Five of the national
networks encompass more than 9,000 ATMs and over 5,000
The nine largest regional networks
consist of over 7,000 ATMs and 2,700 financial institutions.
Put differently, as of 1983, the customers of 7,500 banks were
using 16,000 ATMs that were connected to shared networks.
These ATMs processed about 60 million transactions a month.
Thus, shared ATM networks have become an integral part of the
nation's commercial fabric.
The Marine decision has placed all these extensive network
arrangements, and the public benefits derived from them, in
In that case,
the district court held that, by
allowing its customers to use an ATM established by a grocery store, Marine Midland Bank was engaged in illegal branching.
This decision has already had a chilling effect on the
development of new networks.
Banks are putting plans for
future shared networks on hold until the outcome of the Marine
case is clear.
If the decision is upheld, not only will the
future development of networks be halted, but the existing
networks would also become unravelled.
Many institutions would
stand to lose millions of dollars invested in currently
operating shared networks.
Finally, and most importantly, the