On August 18, the Federal Deposit Insurance Corporation (“FDIC”) issued Financial Institutions Letter 40-2022 (“FIL 40-2022”), which provided supervisory guidance for state non-member banks and multiple non-sufficient funds (“NSF”) fees. FIL 40-2022 and its attached guidance is similar in content to an issue the FDIC highlighted in its March Consumer Compliance Supervisory Highlights.
The FDIC stated that it is issuing the guidance because of its observations in consumer compliance exams where consumers are charged multiple NSF fees for the same transaction when a merchant resubmits the transaction for payment. The FDIC has also observed that some institutions’ disclosures did not adequately describe the institution’s re-presentment practice. The FDIC stated that such practices could result in being deemed a violation of law in exams as an unfair and/or deceptive practice in violation of Section 5 of the FTC Act.
The FDIC’s guidance encouraged institutions to consider implementing the following practices to mitigate the risks noted in the guidance:
This guidance from the FDIC is fairly broad, and, interestingly, is not presented as interagency guidance. Arguably, it might have been more likely to see such guidance from the Consumer Financial Protection Bureau or the Federal Trade Commission. The FIL 40-2022 guidance also seems to toe the line (if not go beyond the line) of the federal banking agencies’ so-called 2018 Guidance on Guidance by seemingly giving a list of requirements for state non-member banks under the guide of encouragement. The Guidance on Guidance was codified as a final rule in 2021. For the FDIC, this rule can be found at 12 C.F.R. Part 302.