FDIC Rescinds 2023 Guidance on Nonsufficient-Funds Fees

Banks charge nonsufficient-funds, or NSF, fees when an account lacks enough money to cover a payment and the transaction is returned. Customers may be charged repeatedly if a merchant resubmits the same transaction. On June 16, 2023, the Federal Deposit Insurance Corporation issued FIL-32-2023, warning that the practice could violate Section 5 of the Federal Trade Commission Act, but it did not set a fixed dollar amount or fee cap.

On April 10, 2026, the FDIC immediately rescinded the guidance through FIL-14-2026, finding it overly broad and unclear about what disclosures for resubmitted transactions would be considered “unfair.” The Minnesota Bankers Association and Lake Central Bank had previously filed a lawsuit, but the Eighth Circuit Court of Appeals upheld its dismissal for lack of standing on September 17, 2025. Banks must still disclose fees accurately and comply with existing laws and regulations.