North Dakota Bankers
Extraordinary Leadership for North Dakota Banks

Re-Presentment Remains in the News

Re-Presentment Remains in the News

Posted: Nov 22 2022
Republican representatives in the Congress are taking note of recent developments in Re-Presentment and re-presented transactions.  Representative French Hill (R – AR) wrote to the Federal Deposit Insurance Corporation (FDIC) on supervisory practices related to re-presented transactions.  Representative Hill raised concerns that the FDIC has “in essence… establish(ed) new disclosure standards for Non-Sufficient Funds (NSF) fees without warning and without rulemaking.”
 
To view the letter, visit: https://www.aba.com/-/media/documents/letters-to-congress-and-regulators/20221116-jfh-letter-to-fdic.pdf
 
In related news: the FDIC continues to scrutinize banks that charge multiple NSF fees on these items according to its Financial Institution Letter (FIL) from August 2022.
 
The FDIC noted in the FIL that “if a financial institution assesses multiple NSF fees arising from the same transaction, but disclosures do not adequately advise customers of this practice”—i.e., unclear definitions of “per item" or “per transaction”—then the “omission of this information is considered to be deceptive” under Section 5 of the FTC Act. The FDIC also stated that an institution may be cited for “unfairness” under Section 5 “if multiple NSF fees are assessed for the same transaction in a short period of time without sufficient notice or opportunity for customers to bring their account to a positive balance in order to avoid the assessment of additional NSF fees.”
 
In the FIL, the FDIC stated its expectation that banks “self-identify and correct violations”—i.e., strengthen its disclosure regarding the charging of multiple NSF fees and remediate affected customers. “Examiners will generally not cite UDAP violations that have been self-identified and fully corrected prior to the start of a consumer compliance examination,” said the FIL. The FIL also stated the FDIC’s expectations regarding a “lookback” period for providing remediation.
 
To view the FIL, visit: https://www.fdic.gov/news/financial-institution-letters/2022/fil22040.html
 
 

Designed and developed by Odney