The Illinois Uniform Commercial Code (UCC) limits returned check fees to $4.50 for commercial accounts. We are not aware of any limits on returned check fees for commercial accounts in Missouri.

The applicability of this Illinois $4.50 limit on returned check fees for the Missouri branches of Illinois state-chartered banks is a complex question that has no definitive answer. The answer would depend on a complicated analysis of the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994, along with its 1997 amendments, plus OCC rules for national banks and federal preemption principles relating to deposit accounts, together with the Illinois Banking Act’s “wild card” provisions and Missouri law.

While there are no court decisions or regulatory agency opinions relating to this question, to our knowledge most national banks in Illinois comply with the Illinois law for accounts maintained in Illinois, while looking to the laws of the “host state” for accounts maintained out-of-state. As noted above, the viability of this approach for Illinois state-chartered banks is less clear. Consequently, your bank’s decision to charge a returned check fee that is higher than $4.50 to commercial customers with accounts at your Missouri branches is a risk-based decision for your bank to make. As an Illinois state-chartered bank, the conservative position would be to set a ceiling of $4.50 on returned check fees for all of your commercial customers, regardless of their branch location.

Note that the $4.50 limit on charges for returned checks in the Illinois law applies only to commercial accounts, not to consumer accounts.

For resources related to our guidance, please see:

• Illinois 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.”)