Are the following fee caps still in place for Illinois chartered banks — the greater of $25 or actual costs for an overdraft or insufficient funds fee, and a returned check fee of up to $4.50 for commercial accounts? Are there any other fee caps we should be aware of?

Yes, the fee caps you referenced are still in place. Regarding other fees, Illinois chartered banks generally may charge any fees agreed to by their customers, as discussed in more detail below.

Section 3-806 of the Illinois Uniform Commercial Code (UCC) provides that any person who issues a check “that is not honored upon presentment . . . because the drawer does not have sufficient funds in his account . . . shall be liable in the amount of $25, or for all costs and expenses, including reasonable attorney’s fees, incurred by any person in connection with the collection of the amount for which the check or other draft was written, whichever is greater.” Since “all costs and expenses” may be difficult to quantify in many cases, the $25 returned check charge generally is a good standard to charge for a returned check involving a consumer account in Illinois. The Illinois UCC also expressly limits the returned check fee for commercial accounts to $4.50.

As for other fees, the Illinois Banking Act generally provides that state banks may charge account fees that have been agreed to by their customers and the establishment of such fees is a “business decision to be made by a bank according to prudent business judgment and safe and sound operating standards.”

Regarding extensions of credit, the Illinois Banking Act also provides that banks may “elect to contract for and receive interest, fees, and other charges for extensions of credit” subject only to section 4(1) of the Interest Act and any laws applicable to “credit secured by residential real estate.” This provision applies to banks “notwithstanding the provisions of any other law.” Subsection 4(1) of the Interest Act permits banks to collect interest and charges at any rate agreed upon by a bank and its borrower and specifies that it is lawful to charge, contract for, and receive any rate or amount of interest or compensation (except as otherwise provided in the Predatory Loan Prevention Act) for loans secured by a mortgage on real estate.

For resources related to our guidance, please see:

Illinois UCC, 810 ILCS 5/3-806 (“Any person who issues a check or other draft that is not honored upon presentment because the drawer does not have an account with the drawee, or because the drawer does not have sufficient funds in his account, or because the drawer does not have sufficient credit with the drawee, shall be liable in the amount of $25, or for all costs and expenses, including reasonable attorney’s fees, incurred by any person in connection with the collection of the amount for which the check or other draft was written, whichever is greater.”)

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. In establishing account service charges, the bank may consider, but is not limited to considering, the costs incurred by the bank, plus a profit margin, for providing the service, the deterrence of misuse of the bank’s services, the establishment of the competitive position of the bank in accordance with the bank’s marketing strategy, and the maintenance of the safety and soundness of the bank.”)

Illinois Banking Act, 205 ILCS 5/5e(a) (“Notwithstanding the provisions of any other law in connection with extensions of credit, a State bank may elect to contract for and receive interest, fees, and other charges for extensions of credit subject only to the provisions of subsection (1) of Section 4 of the Interest Act, except for extensions of credit secured by residential real estate, which shall be subject to the laws applicable thereto.”)

Interest Act, 815 ILCS 205/4(1) (“It is lawful for a state bank or a branch of an out-of-state bank, as those terms are defined in Section 2 of the Illinois Banking Act, 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. . . . It is lawful to charge, contract for, and receive any rate or amount of interest or compensation, except as otherwise provided in the Predatory Loan Prevention Act, with respect to the following transactions: . . . (l) Loans secured by a mortgage on real estate.”)