By J. Marc Ward - Fredrikson & Byron, P.A
If you charge a fee for non-sufficient funds (NSF) you should be aware of a recent guidance from the FDIC. This is doubly true if you charge multiple NSF fees for re-presentment of an item. And it becomes critical if you rapidly charge these fees without giving your customer sufficient time to cover the amount due.
FDIC guidance does not lay down hard and fast rules regarding NSF policies and practices. It does not define how much time a customer should have between re-presentments but only that it cannot be a “short period of time.”
The biggest challenge for banks that rely on core processors to assess NSF fees will be core processor cooperation. While the FDIC encourages banks to work with these third parties to reduce the risk of unfair or deceptive practices with regard to NSF fees, it has been our experience that data processors are not very cooperative in correcting these practices.
FDIC guidance does not lay down hard and fast rules regarding NSF policies and practices. It does not define how much time a customer should have between re-presentments but only that it cannot be a “short period of time.”
The biggest challenge for banks that rely on core processors to assess NSF fees will be core processor cooperation. While the FDIC encourages banks to work with these third parties to reduce the risk of unfair or deceptive practices with regard to NSF fees, it has been our experience that data processors are not very cooperative in correcting these practices.
RSS Feed