In August 2024, the FDIC issued FIL-53-2024 addressing when a bank must obtain a branch license for an interactive teller machine (ITM.)
My bank is planning on expanding its ITM service to a non-branch location. Our current software allows customers using the ITM to initiate a session with bank personnel, but the customer cannot terminate the session: the teller must end the session. However, the ITM may also function as an ATM, permitting the customer to initiate and end the transaction.
Q In this scenario, is FDIC branch approval required, or, since the ITM can also function as an ATM, is it not necessary?
A In order for an ITM not to require FDIC branch approval, the FIL states, “[T]o the extent that bank personnel have the ability to remotely assist the customer with the operation of the ITM to perform core banking functions, customers must also be able to perform such transactions without the involvement of bank personnel and must have the sole discretion to initiate and terminate interactive sessions with bank personnel.” (emphasis added)
If only bank personnel may terminate an interactive ITM session, the ITM does not qualify for the exemption from FDIC branch approval. The fact that the ITM functions as ATM and gives customers the sole discretion to initiate and terminate a transaction is not relevant.
For more information, contact ABA’s Leslie Callaway.
Please note that this section is not a substitute for professional legal advice.
