On October 26, 2022, the CFPB published a Compliance Bulletin, Bulletin 2022-06, which makes the case that Returned Deposited Item fees should be considered unfair under the Consumer Financial Protection Act. Returned Deposited Item fees or Chargeback Item fees are generally assessed when a check is returned to the consumer because it could not be processed against the account from which it was drawn. This could happen for various reasons including insufficient funds in the account where funds were drawn, stop payments, and missing signatures. The CFPB sees the fee as unfair noting that consumers generally cannot anticipate which item might be returned, thus they cannot reasonably avoid the fee. Financial institutions should review this bulletin and practices relative to charging Returned Deposited Item fees. Community banks generally charge small, if any, fees for Returned Deposited Item fees on consumer accounts; therefore, ceasing to charge the fee would likely have little financial impact for most institutions.
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