In one of the counties in which we operate, the law requires all merchants who operate a private ATM to register each ATM with the Office of Consumer Affairs. During a site visit for a new business relationship, it was noted that they have a private ATM on site. The ATM displays a permit from the office of Consumer Affairs which is is currently valid. It states that it is issued to an entity other than our business customer who indicated that they do not own or operate the ATM; they only lease their commercial space. For this type of scenario, do most FIs require a copy of the current lease or operating agreement?

If the ATM is only placed in your customer's place of business and your customer is not involved with replenishing the cash in the machine, then you should not see any ACH credits for the ATM usage and you should not need to see (in my opinion) the lease or agreement.

What my institution does in cases like that is obtain a copy of the agreement between our customer and the owner of the ATM. That way, you've proven that you've done your due diligence in the event that it were to somehow come up during an examination.

I cannot speak to what most institutions do, but at mine we do not obtain the lease in those cases.

In my opinion, that level of EDD should be reserved for the highest level of risk relative to ATMs (i.e. funds flowing through bank). Examiners have never questioned that approach at my Bank. If they did, I would push back.

Same here.

Just another vote for obtaining some form of documentation showing who is maintaining and filling the privately owned ATMs. If for some reason illegal funds are being used in the ATM, the customers of your business customer will probably be spending some, if not all of the funds in the business, and then it will be deposited in your bank. It just adds another level of layering.

The party responsible for replenishing the cash in the machine is the one receiving the ACH credits, so if it is not your customer I don't see why you would need a copy of the agreement.