ICBA offers guidance on FDIC’s new approach to re-presented transactions

With the FDIC taking a new, stricter approach to how banks treat single items that are repeatedly rejected for insufficient funds, ICBA released a member-protected fact sheet on the issue with recommendations for reducing the risk of penalties.

Background: Some financial institutions charge multiple non-sufficient-funds fees for the same transaction when a merchant re-presents an ACH payment or check more than once after the transaction has been declined.

New Scrutiny: The FDIC said in its Spring 2022 Consumer Compliance Supervisory Highlights that it is increasingly scrutinizing these fees, with community banks reporting that the agency is now threatening or imposing violations even on banks that are compliant with fee disclosure requirements.

ICBA Guidance: ICBA’s fact sheet details the FDIC’s comments on the issue and provides guidance to help community banks avoid examination penalties from the agency’s change in direction.