FDIC rescinds NSF fee guidance

On April 10, 2026, the Federal Deposit Insurance Corporation pulled back a 2023 letter that had warned banks about charging more than one nonsufficient-funds fee when the same unpaid payment gets sent through again. The agency said the old letter was “overly broad in scope” and canceled it effective immediately. (fdic.gov) This is about a very specific banking moment: a merchant tries to collect a payment, the account is short, the payment bounces, and the merchant or payment network submits that exact payment again a day or two later. Some banks charged a fresh fee each time that same item came back unpaid. (fdic.gov) The Federal Deposit Insurance Corporation first targeted that practice in August 2022, when it told the banks it supervises that multiple fees on the same re-presented transaction raised risks under the ban on unfair or deceptive acts or practices in Section 5 of the Federal Trade Commission Act. In June 2023, it narrowed that message and said examiners would focus on cases where a legal violation was identified. (fdic.gov) The 2023 version did not ban the fee outright. It told banks the problem often turned on disclosure, because many account agreements said a fee would be charged for “an item” returned unpaid without clearly telling customers that one failed purchase could trigger two or three separate charges if it was re-submitted. (fdic.gov) The new rollback does not say repeated fees are suddenly risk-free. It says the 2023 letter is gone, which means one supervisory warning is off the table even though banks still face the underlying unfair-or-deceptive-practices law, private lawsuits, state law claims, and their own customer backlash if disclosures are weak. (fdic.gov) (bloomberglaw.com) That shift fits a bigger turn in bank-fee politics. The Consumer Financial Protection Bureau spent the last few years attacking what it called “junk fees,” and large banks including Bank of America, Wells Fargo, Citibank and JPMorgan Chase cut or eliminated many overdraft and nonsufficient-funds charges between 2021 and 2023 under legal, political, and competitive pressure. (consumerfinance.gov) (bankofamerica.com) (wellsfargo.com) Smaller banks and trade groups never liked the Federal Deposit Insurance Corporation’s approach. The Independent Community Bankers of America said in 2023 that the agency had already softened its stance by saying examiners would not demand broad “lookback” reviews unless there was a likelihood of substantial consumer harm. (icba.org) The practical effect inside banks is less about reviving a single fee overnight and more about changing the math in compliance meetings. When supervisors stop signaling that a practice is a likely exam problem, product teams, lawyers, and finance executives get more room to ask whether fee revenue is worth the litigation and reputation risk. (americanbanker.com) (bloomberglaw.com) Banks also have another reason to move carefully: the Consumer Financial Protection Bureau finalized an overdraft rule in late 2024 aimed at very large banks with more than $10 billion in assets, although that rule has faced political and legal resistance since then. Even with the Federal Deposit Insurance Corporation stepping back on this one letter, the fee fight is still happening across multiple regulators and courts. (consumerfinance.gov) So the immediate news is narrow but the signal is broad. A federal banking agency just erased a Biden-era warning on repeated nonsufficient-funds charges, and that tells banks the exam climate in Washington changed on April 10, 2026, even if the legal and commercial risks did not disappear with the letter. (fdic.gov)