Two favorable rulings were handed down in November on cases involving Texas Community Banks facing allegations of ADA violations when one of their ATMs allegedly did not operate properly for a blind Plaintiff. Vendors specific to the Community Banking industry stepped up to defend these actions, in a great display of advocacy. Experience has taught us that how these first cases are treated has a large impact on whether more are filed.
The lawsuits were iniated by the same lawyers who vigorously pursued the EFTA “class actions” for lack of a second sign on your ATM. The rulings affect only two of the many cases that allege non-compliance against community banks nationwide.
The legal background for these suits came from federal and state statutes, as well as regulations designed to remove architectural barriers for the disabled. These statutes generally track Title III of the Americans with Disabilities Act [the “ADA”], which requires places of public accommodation, a term defined in the ADA to include banks, to provide disabled customers with reasonable and appropriate accommodations that enable them to partake of the bank’s services to the same extent as non-disabled customers because of their disability.
To implement the ADA, the Department of Justice established an advisory committee to create accessibility guidelines that became known as the ADA Accessibility Guidelines, usually referred to as ADAAG. There are two comprehensive sets of these ADAAG, one issued in 2004 and another issued in 2010. The 2010 Standards, which incorporate the 2004 standards and include provisions governing ATMs, became effective on March 15, 2012. Under the ADAAGs, at least one ATM at every location must meet the specific requirements. The ADAAGs treat lobby ATMs and drive-up ATMs at the same facility as two different locations; therefore, say the Plaintiffs, machines at both locations must comply. The issue will be particularly acute at drive-up ATMs, where it is more difficult to provide a reasonable alternative service.
The best way to avoid these problems is to make sure your ATMs are compliant; if they provide audible services for visually-impaired users, check the functionality from time to time to make sure it works. The response for many banks has been to order new, compliant equipment. However, some manufacturers were not able to deliver it prior to the effective date of the law, due to the high demand of last minute orders.
Another avenue that's important in these matters is insurance. To ensure that coverage is not lost because of late notice, submit the claim early! Early reporting may also generate a dialogue with the insurer that leads to some additional support, just as occurred when IBAT Financial Services worked with insurers to secure coverage for the aforementioned EFTA suits as well as these ADA claims involving the ATMs.
In the case of the EFTA suits, Travelers was first to provide defense and Chubb followed suit, once prompted by IBAT Financial Services. In the ATM claims, Chubb and Everest provided defense and potentially settlement through some broadening endorsements that may or may not have been part of each policyholder's coverage. Once prompted, Travelers followed suit with defense coverage in their standard policy form. IBAT Financial Services has been very vigorous in advocating for the unique coverage needs of IBAT member community banks and in explaining to insurers how to meet those needs through practical changes to coverage that have helped IBAT members obtain coverage on an ongoing basis.
Other vendors were also prompt to step up in assisting with these claims concerns, including Cox Smith Matthews who received favorable rulings this month that dismissed two cases due to lack of standing. The court stated that since the Plaintiff lived between 7-20 miles from the ATMs in question; had never visited more than one ATM owned by each of the banks and was not a customer of either bank the ATMs in question were not the most "conveniently located" and therefore the precedent case relied upon by the Plaintiff did not persuade the Court that damages were incurred by the Plaintiff.
Our sincere appreciation goes out to our service partners who continue to help IBAT serve the needs of our members and spring into action, as a true advocate of Texas Community Banks!