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
Commissioner
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