To: ALL TENNESSEE STATE CHARTERED BANKS
SUBJECT: AUTOMATED LOAN MACHINES (ALMs)
DATE: APRIL 28, 1997
As a result of the Economic Growth and Regulatory Paperwork Reduction Act, which became effective on September 30, 1996, automated teller machines (ATMs) and remote service units (RSUs) were excluded from the definition of a branch for federal regulatory purposes. In its interpretive letter #772, dated March 1997, the Office of the Comptroller of the Currency opined that automated loan machines (ALMs) qualify as an ATM or RSU and are therefore not a branch for purposes of the various branching restrictions and related approval requirements imposed by federal regulations. ALMs are electronic devises designed to principally take and process loan applications, and if approved, either deposit the loan proceeds into an existing account of the borrower, open a new account to accept the funds, or print out a check. As technology continues to develop, the department recognizes that more and more financial institutions will begin to perform authorized activities and functions via electronic means and facilities. Thus, as a way of allowing state chartered banks to maintain competitive equality with national banks and pursuant to T.C.A. Section 45-2-601, this department hereby waives any application, notice, publication, or fee for a bank domiciled in Tennessee to establish an ALM. Management and the Board of Directors should be mindful, however, that prior to placing a remote service unit (RSU) in another state that the other state's interstate banking/branching laws may require authorization to do a general banking business within the state. Therefore, we recommend that you contact the department prior to the placement of such machines outside of Tennessee.
This Bulletin takes effect immediately.
If you have any questions regarding this Bulletin, please contact either Assistant Commissioner Derek Carrier or Program Administrator Curt Faulkner at (615) 741-6013.
Bill C. Houston