The FDIC updated its supervisory guidance on multiple re-presentment nonsufficient funds fees to clarify that it will not ask institutions to conduct a lookback review absent a likelihood of substantial consumer harm.
Details: The FDIC said it has gained additional data about the amount of consumer harm associated with this issue since it issued guidance last year. In the revised guidance, the agency added a fourth footnote citing the ongoing challenges of accurately identifying re-presented transactions through core processing systems as reason for the lookback change.
Background: Some financial institutions charge multiple NSF fees for the same transaction when a merchant re-presents an ACH payment or check more than once after the transaction has been declined.
Agency Meeting: ICBA leadership community bankers and staff met earlier this year with FDIC officials to express concerns with the agency’s treatment of re-presentment fee disclosures. ICBA called on the FDIC to rescind lookback requirements, focus on applying its new position on re-presented items going forward, and provide reasonable time for community banks to update their disclosures and practices to comply with the FDIC guidance.
ICBA Guide: With community banks reporting that the FDIC is imposing violations even on banks that are compliant with fee disclosure requirements, ICBA last year released a member-protected fact sheet on the issue with recommendations for reducing the risk of penalties.