No, you may not charge a fee of more than $4.50 for returned checks or other drafts on a commercial account. However, this prohibition does not apply to consumer accounts.

This provision was revised in 1991 to permit banks to charge commercial customers for returned checks, which previously had been prohibited since 1985. The $4.50 amount was intensely negotiated between the banking and retail merchant industries and has not been increased since it was enacted.

We note that some national banks take the view that this restriction is preempted by federal law with regard to national banks. Other national banks stay within the $4.50 restriction, either because they do not take that view or for competitive reasons.

For resources related to our guidance, please see:

• Uniform Commercial Code, 810 ILCS 5/3-806 (“A fee or charge not to exceed $4.50 may be assessed to any person or owner of a commercial checking account or other similar commercial account where a check or other draft that is deposited into the account is dishonored upon presentment because of insufficient funds or because the drawer does not have an account with the drawee; provided, however, that, the limitation on the fee or charge specified in this paragraph does not apply to any fee or charge assessed to any bank or other depository institution or to any non-commercial checking account or other similar non-commercial account.”)