STATE OF CONNECTICUT DEPARTMENT OF BANKING * * * * * * * * * * * * * * NOTICE OF INTENT TO ISSUE * ORDER TO CEASE AND DESIST IN THE MATTER OF: * * NOTICE OF INTENT TO ISSUE FIRST UNION NATIONAL BANK * ORDER IMPOSING CIVIL PENALTY * FLEET NATIONAL BANK * NOTICE OF RIGHT TO HEARING * BANKBOSTON, N.A. * AND * ("Respondents") * TEMPORARY ORDER TO CEASE * AND DESIST * * * * * * * * * * * * * * I. LEGAL AUTHORITY AND JURISDICTION Pursuant to the authority granted by Section 36a-17(a) of the Connecticut General Statutes, the Banking Commissioner (the "Commissioner") has investigated the activities of the Respondents to determine if they have violated the provisions of Part IV of Chapter 664c of the Connecticut General Statutes, "Automated Teller Machines, Satellite Devices and Point of Sale Terminals" (the "Act"). Section 36a-17(a) of the General Statutes states in relevant part that: The commissioner, in the commissioner's discretion, may make such public or private investigations or examinations within or outside this state, concerning any person subject to the jurisdiction of the commissioner, as the commissioner deems necessary to carry out the duties of the commissioner. Section 36a-52(a) of the Connecticut General Statutes states: Whenever it appears to the commissioner that any person has violated, [or] is violating . . . any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may send a notice to such person by registered or certified mail, return receipt requested. The notice shall be deemed received by the person on the earlier of the date of actual receipt, or seven days after mailing. Any such notice shall include: (1) A statement of the time, place, and nature of the hearing; (2) a statement of the legal authority and jurisdiction under which the hearing is to be held; (3) a reference to the particular sections of the general statutes . . . alleged to have been violated; (4) a short and plain statement of the matters asserted; and (5) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice. If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice, unless the person fails to appear at the hearing. After the hearing, the commissioner shall determine whether an order to cease and desist should be issued against the person named in the notice. If the person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner shall issue an order to cease and desist against the person. No such order shall be issued except in accordance with the provisions of chapter 54. Section 36a-52(b) of the Connecticut General Statutes states: If the commissioner finds that the public welfare requires immediate action, the commissioner may incorporate a finding to that effect in the notice sent in accordance with subsection (a) of this section and issue a temporary order requiring the person to cease and desist from the activity which constitutes such alleged violation. Such temporary order shall become effective on receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in the notice. Section 36a-50(a) of the Connecticut General Statutes states: (1) Whenever the commissioner finds as the result of an investigation that any person has violated any provision of the general statutes within the jurisdiction of the commissioner, . . . the commissioner may send a notice to such person by registered or certified mail, return receipt requested. The notice shall be deemed received by the person on the earlier of the date of actual receipt or seven days after mailing. Any such notice shall include: (A) A statement of the time, place, and nature of the hearing; (B) a statement of the legal authority and jurisdiction under which the hearing is to be held; (C) a reference to the particular sections of the general statutes, regulations, rules or orders alleged to have been violated; (D) a short and plain statement of the matters asserted; (E) the maximum penalty that may be imposed for such violation; and (F) a statement indicating that such person may file a written request for a hearing on the matters asserted within fourteen days of receipt of the notice. (2) If a hearing is requested within the time specified in the notice, the commissioner shall hold a hearing upon the matters asserted in the notice unless such person fails to appear at the hearing. After the hearing, if the commissioner finds that the person has violated any such provision, . . . the commissioner may, in the commissioner's discretion and in addition to any other remedy authorized by law, order that a civil penalty not exceeding seven thousand five hundred dollars per violation be imposed upon such person. If such person does not request a hearing within the time specified in the notice or fails to appear at the hearing, the commissioner may, as the facts require, order that a civil penalty not exceeding seven thousand five hundred dollars per violation be imposed upon such person. (3) Each action undertaken by the commissioner under this subsection shall be in accordance with the provisions of chapter 54. II. MATTERS ASSERTED 1. Respondent First Union National Bank is a national banking association with its main office located at 301 South Tryon Street, Charlotte, North Carolina. 2. Respondent Fleet National Bank is a national banking association with its main office located at 1 Monarch Place, Springfield, Massachusetts. 3. Respondent BankBoston, N.A. is a national banking association with its main office located at 100 Federal Street, Boston, Massachusetts. 4. Respondents maintain branches and automated teller machines ("ATMs") in Connecticut. 5. On September 14, 1995, the Commissioner opined that Section 36a-156 of the Act prohibits state-chartered or federally-chartered banks in Connecticut from imposing a transaction fee for the use of their ATMs by a person who does not otherwise maintain a banking relationship with such banks ("surcharge"). 6. The Commissioner's September 14, 1995 opinion has not been overturned by any court. 7. Respondents are currently imposing surcharges for use of their ATMs in Connecticut. III. VIOLATIONS OF CONNECTICUT LAW Section 36a-156 of the Act provides, in part, that: (a) One or more banks, Connecticut credit unions or federal credit unions which have established a satellite device or point of sale terminal shall make the satellite device or point of sale terminal available on a nondiscriminatory basis for use by any other bank, Connecticut credit union or federal credit union, upon payment by each such other bank or credit union of a reasonably proportionate share of all acquisition, installation and operating costs of the satellite device or point of sale terminal. The satellite device or point of sale terminal shall identify with equal prominence all of the banks, credit unions or network systems which use the satellite device or point of sale terminal. Section 36a-412(a)(4)(B) of the Connecticut General Statutes, as amended by P.A. 97-223 and P.A. 98-177, states, in part, that: The laws of this state shall apply to any branch in this state of a federally-chartered out-of-state bank to the same extent as such laws would apply if the branch were a federal bank. Section 36a-2(41), as amended by P.A. 97-223 and P.A. 98-258, states that: 'Out-of-state bank' means any institution that engages in the business of banking, but does not include a bank, Connecticut credit union, federal credit union or out-of-state credit union; 1. The Respondents are out-of-state banks within the meaning of Section 36a-2(41) of the Connecticut General Statutes, as amended. 2. Pursuant to Section 36a-412(a)(4)(B), as amended, as federally-chartered out-of-state banks, the Respondents are subject to Section 36a-156 of the Act. 3. The Respondents' imposition of a surcharge constitutes a violation of Section 36a-156 of the Act. 4. The Respondents' violation of Section 36a-156 of the Act, forms the basis for the issuance of an Order to Cease and Desist pursuant to Section 36a-52 of the Connecticut General Statutes and Order Imposing Civil Penalty pursuant to Section 36a-50 of the Connecticut General Statutes. IV. NOTICE OF INTENT TO ISSUE ORDER TO CEASE AND DESIST AND NOTICE OF INENT TO ISSUE ORDER IMPOSING CIVIL PENALTY WHEREAS, the Commissioner has determined that the Respondents have violated Section 36a-156 of the Act, which violations constitute sufficient grounds to issue an Order to Cease and Desist pursuant to Section 36a-52 of the Connecticut General Statutes and Order Imposing Civil Penalty pursuant to Section 36a-50 of the Connecticut General Statutes. AND WHEREAS, the Commissioner intends to impose a civil penalty upon each Respondent not to exceed $7,500 per violation. NOW THEREFORE, pursuant to Sections 36a-52(a) and 36a-50(a) of the Connecticut General Statutes, the Commissioner affords the Respondents an opportunity for a hearing on the assertions set forth above. A hearing will be granted to the Respondents if a written request for a hearing is received by the Department of Banking, Legal Division, 260 Constitution Plaza, Hartford, Connecticut 06103 within fourteen (14) days following the Respondents' receipt of this notice as defined by Sections 36a-52 and 36a-50 of the Connecticut General Statutes. The notice shall be deemed received on the earlier of the date of actual receipt, or seven days after mailing. The enclosed Appearance Form must be filled out and returned with each Respondent's written request for a hearing and mailed to the above address. If the Respondents will not be represented by an attorney at the hearing, please fill out the Appearance Form as "pro se." If a hearing is requested by any Respondent, the hearing will be held at 10 a.m. on December 3, 1998, at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut, in accordance with the provisions of Chapter 54 of the General Statutes, unless such Respondent fails to appear at the requested hearing. At such hearing, such Respondent will have the right to appear and present evidence and argument on all issues of fact and law to be considered by the Commissioner. If a hearing is not requested within the time prescribed, the Commissioner will issue an order that each such Respondent CEASE AND DESIST from violating Section 36a-156 of the Act, which prohibits the Respondents from imposing surcharges in Connecticut, and order that a CIVIL PENALTY be imposed upon each such Respondent not to exceed $7,500 per violation. V. FINDING AND TEMPORARY ORDER REQUIRING RESPONDENTS TO CEASE AND DESIST FROM VIOLATING SECTION 36a-156 OF THE ACT WHEREAS the Commissioner finds that the public welfare requires immediate action with respect to the Respondents' conduct, in that, among other things: (1) persons, throughout the state, who are non-depository customers of the Respondents will be financially harmed by their unlawful and unauthorized surcharges, (2) Respondents collectively own the majority of ATMs in Connecticut, which severely limits the ability of Connecticut consumers to use ATMs that do not impose surcharges, and (3) Respondents will not be able to refund surcharges imposed, during the period that this administrative action is pending, by transmitting the surcharges to the non-customers' accounts in the case of non-customers who have closed their bank accounts. THE COMMISSIONER THEREFORE ORDERS, pursuant to Section 36a-52(b) of the Connecticut General Statutes, that First Union National Bank, Fleet National Bank and BankBoston, N.A. CEASE AND DESIST from imposing surcharges for the use of each such Respondent's ATMs in Connecticut, in violation of Section 36a-156 of the Act. This temporary order shall become effective on receipt and, unless set aside or modified by a court, shall remain in effect until the effective date of a permanent order or dismissal of the matters asserted in this notice. Dated at Hartford, Connecticut ____________________ this 10th day of November 1998. John P. Burke Banking Commissioner CERTIFICATION I hereby certify that on this 10th day of November 1998, the foregoing Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Issue Order Imposing Civil Penalty, Notice of Right to Hearing, and Temporary Order to Cease and Desist was sent by registered mail, return receipt requested to Thomas H. O'Brien, President, First Union National Bank, 300 Main Street, Stamford, Connecticut 06904, registered mail no. R364328835; John Georgius, President, First Union National Bank, 301 South Tryon Street, Charlotte, North Carolina 28288, registered mail no. R364328836; William C. Mutterperl, Executive Vice President, Fleet National Bank, 1 Federal Street, Boston, Massachusetts 02211, registered mail no. R364328837; Richard A. Higginbotham, President and CEO-Connecticut, Fleet National Bank, 777 Main Street, Hartford, Connecticut 06115, registered mail no. R364328838; Henrique C. Meirelles, President, BankBoston, N.A., 100 Federal Street, Boston, Massachusetts 02110, registered mail no. R364328839; and R. Nelson Griebel, Regional President, BankBoston, N.A., 100 Pearl Street, Hartford, Connecticut 06103, registered mail no. R364328840. __________________ Nirja Savill Principal Attorney STATE OF CONNECTICUT DEPARTMENT OF BANKING * * * * * * * * * * * * * * NOTICE OF INTENT TO ISSUE * ORDER TO CEASE AND DESIST IN THE MATTER OF: * * NOTICE OF INTENT TO ISSUE FIRST UNION NATIONAL BANK * ORDER IMPOSING CIVIL PENALTY * FLEET NATIONAL BANK * NOTICE OF RIGHT TO HEARING * BANKBOSTON, N.A. * AND * ("Respondents") * TEMPORARY ORDER TO CEASE * AND DESIST * * * * * * * * * * * * * * APPEARANCE Please enter the appearance of: ____________________________________________ (Attorney/Pro Se Respondent) ____________________________________________ (Mailing Address) ____________________________________________ ____________________________________________ Telephone Number: ___________________ The above-named individual is appearing in the above-entitled case for: ( ) The Respondent ( ) All Respondents ( ) The following Respondent(s) only ______________ _____________________________________________________ Signed _____________________________ Date: ________ (Attorney/Pro Se Respondent)