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FDIC Issues Representment Guidance

FDIC Issues Representment Guidance

Posted: Aug 24 2022
The FDIC released guidance last week regarding the issue of representment, or the practice of charging multiple non-sufficient funds fees for transactions presented multiple times against insufficient funds in a customer’s account.  The guidance, which is similar to the recommendations in an article in the agency’s Supervisory Insights publication, applies only to FDIC-regulated institutions.  

According to the FDIC, banks are encouraged to pursue a range of “risk-mitigating activities” regarding NSF fees, including eliminating the fees; declining to charge more than one NSF fee for the same transaction, regardless of whether the item is re-presented; conducting a comprehensive review of policies and practices related to re-presentments; and clearly communicating to customers the amount of fees and when those fees will be imposed.  The agency noted that if institutions self-identify re-presentment NSF fee issues, they are expected provide restitution to affected customers and “promptly” correct NSF fee disclosures and account agreements.

The guidance also recognizes an institution’s proactive efforts to self-identify and correct violations, noting that, “Examiners will generally not cite (unfair or deceptive acts or practices) violations that have been self-identified and fully corrected prior to the start of a consumer compliance examination.”  In instances where institutions have been unable to access accurate ACH data for re-presented transactions beyond two years, the FDIC will accept a two-year look-back period for restitution.

To read the guidance, visit:

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