The Illinois Uniform Commercial Code (UCC) limits insufficient funds or returned check fees to $4.50 for commercial accounts, but it does not limit these fees for consumer accounts. For commercial accounts, the fees can be no higher than $4.50, but this limit expressly does not apply to “non-commercial checking or other non-commercial accounts,” which would include consumer accounts. As to non-commercial accounts in this context, Section 5e of the Illinois Banking Act also recognizes that the setting of account fees is a business decision, subject to the account agreement.

In our view, the National Bank Act preempts this fee limit for national banks, and we believe that at least some national banks in Illinois adhere to this preemption argument with respect to their commercial accounts. At the same time, we believe most national banks in Illinois do stay within the $4.50 limit, simply because they wish to remain competitive with state-chartered banks for their business customers, or because they do not wish to take on the argument of preemption in the event that a dispute arises with their business customers. 

For resources related to our guidance, please see:

• Illinois UCC, 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.”)

• Illinois Banking Act, 205 ILCS 5/5e(b) (“The establishment of account service charges and the amounts of the charges not otherwise limited or prescribed by law is a business decision to be made by a bank according to prudent business judgment and safe and sound operating standards.”)

• OCC Regulations, 12 CFR 7.4002(a) (“A national bank may charge its customers non-interest charges and fees, including deposit account service charges.”)

• OCC Regulations, 12 CFR 7.4002(b)(2) (“The establishment of non-interest charges and fees, their amounts, and the method of calculating them are business decisions to be made by each bank, in its discretion, according to sound banking judgment and safe and sound banking principles.”)