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FDIC Issues Guidance Regarding Multiple Re-Presentment NSF Fees

On August 18, 2022, the FDIC issued guidance for financial institutions regarding the practice of charging multiple re-presentment NSF fees. According to the FDIC, through compliance examinations, the FDIC identified violations of law when financial institutions charged multiple NSF fees for the re-presentment of unpaid transactions. The FDIC stated in the guidance that disclosures given to consumers did not fully and clearly disclose multiple representment NSF fee policies. Specifically, financial institutions failed to sufficiently explain how an item being presented more than once could result in multiple NSF fees.

The FDIC’s guidance notes that practices involving the charging of multiple NSF fees arising from the same unpaid transaction results in heightened risks of violations of Section 5 of the Federal Trade Commission Act, which prohibits unfair or deceptive acts or practices (UDAP). Not clearly and conspicuously disclosing material information to consumers about re-presentment practices could be considered misleading or deceptive under UDAP. Read More