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Emerging Issues

FDIC Deposit Insurance.

The FDIC approved a final rule to increase initial base deposit insurance assessment rates by 2 basis points until the Deposit Insurance Fund (DIF) achieves the FDIC’s long-term goal of a reserve ratio of 2% of insured deposits. The new rates are effective starting January 1st and will be applicable in the first quarterly assessment in 2023.

Multiple Re-Presentment Fees.

As reviewed in our October 2022 monthly compliance update, the FDIC has issued guidance about the consumer compliance risks associated with assessing NSF arising from the re-presentment of the same unpaid transactions. The FDIC cites potential violations under Section 5 of the Federal Trade Commission (FTC) Act. This prohibits unfair or deceptive acts or practices and potential risks that can arise with third parties.

Debit Card Interchange Fees and Routing.

The Federal Reserve Board finalized updates to the board’s rule for debit card transactions. Effective July 1, 2023, this will require debit card issuers to provide two unaffiliated payment networks enable for cord-not-present (CNP) transactions.

Disclosed Bank Fee on Deposit Accounts.

CFPB issued Circular 2022-06 about two fee practices that it considers unfair and unlawful under existing law. The practices targeted include 1. Surprise overdraft fees and 2. Check depositor fee.

Compliance Questions & Answers


Can a bank charge a late fee if a borrower does not pay an existing late fee?


No. You cannot charge a late fee for a late fee. This is called pyramiding of late fees and is prohibited in the servicing practices section of Regulation Z 1026.36(c)(2).

Reference: 12 CFR 1026.36(c)(2).


For time accounts with maturity longer than one year that do not renew automatically, is the bank required to provide disclosures?


For time accounts with a maturity longer than one year that do not renew automatically at maturity, institutions must disclose to consumers the maturity date and whether interest will be paid after maturity.

The disclosures must be mailed or delivered at least 10 calendar days before maturity of the existing account.

The Official Interpretation also states that when funds are transferred following maturity of a non-rollover time account, banks need to provide account disclosures unless a new account is established.

Reference: 12 CFR 1030.5(c) and Official Interpretation of 1030.5(c).