We are not aware of any prohibition against charging a fee for conducting an escrow analysis. However, your bank’s loan agreement with its borrowers must allow your bank to charge additional or unforeseen fees, such as for the analysis you have described. If the agreement does not contain language permitting such charges, then we recommend having the borrower agree to the new fee in writing. In our view, it would be prudent to work with your bank counsel to draft that fee agreement.

If the customer agrees to the fee (either in the existing loan agreement or in a new fee agreement), RESPA outlines the deadlines for issuing any potential refunds. If your analysis uncovers a surplus of $50 or more in the account, your bank must refund the surplus within 30 days from the date of the analysis. If the surplus is less than $50, your bank may refund the amount or credit it against the next year’s escrow payments.

For resources related to our guidance, please see:

• Illinois Banking Act, 205 ILCS 5/5e (“Notwithstanding the provisions of any other law in connection with extensions of credit,” banks may charge “interest, fees, and other charges . . . subject only to the provisions of subsection (1) of Section 4 of the Interest Act” and the laws applicable to real estate loans, provided that the bank sets fees based on its prudent business judgment and safe and sound operating standards.”)

• Interest Act, 815 ILCS 205/4(1) (“It is lawful for a state bank or a branch of an out-of-state bank . . . to receive or to contract to receive and collect interest and charges at any rate or rates agreed upon by the bank or branch and the borrower. . . .”)

• Regulation X, 12 CFR 1024.17(f)(1)(ii) (“The servicer may conduct an escrow account analysis at other times during the escrow computation year. If a servicer advances funds in paying a disbursement, which is not the result of a borrower’s payment default under the underlying mortgage document, then the servicer shall conduct an escrow account analysis to determine the extent of the deficiency before seeking repayment of the funds from the borrower under this paragraph (f).”)

• Regulation X, 12 CFR 1024.17(f)(2)(i) (“If an escrow account analysis discloses a surplus, the servicer shall, within 30 days from the date of the analysis, refund the surplus to the borrower if the surplus is greater than or equal to 50 dollars ($50). If the surplus is less than 50 dollars ($50), the servicer may refund such amount to the borrower, or credit such amount against the next year's escrow payments.”)