FDIC Guidance States that Interactive Teller Machines Do Not Require Approval as Bank Branches

The FDIC issued guidance stating that interactive teller machines (ITMs) generally will not qualify as bank branches which require FDIC approval to establish.

The Federal Deposit Insurance Act requires state nonmember banks to obtain the FDIC’s consent before establishing domestic branches, but also states that automated teller machines and other types of remote service units do not qualify as branches. ITMs resemble automated teller machines but allow customers to interact with live remotely-located tellers to complete a variety of banking transactions.

Consistent with the exclusion of automated teller machines and other types of remote service units from the definition of a branch, the FDIC’s new guidance states that ITMs will generally not constitute branches which require FDIC approval if:

• The ITM is an automated, unstaffed banking facility owned or operated by, or operated exclusively for, the bank;

• The ITM is equipped to enable existing customers to initiate an interactive session with remotely located bank personnel; and

• To 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 the transactions without the involvement of bank personnel and must have the sole discretion to initiate and terminate the interactive sessions with bank personnel.