IBA Compliance Connection

Your go to source for compliance!

We have a question regarding the lookback period for multiple re-presentment non-sufficient funds (NSF) fees referenced in the FDIC’s Supervisory Guidance on Multiple Re-Presentment NSF Fees. We updated our disclosures to include new language on multiple re-presentments and sent a notice to our customers in August 2022. We subsequently updated our fee schedule to include the fee per re-presentment. Should we use the updated disclosure date or updated fee schedule date to determine our lookback period, and how far should our lookback go?

—

by

admin

We do not believe that the lookback period for providing restitution for multiple re-presentment NSF fees is tied to updated disclosures or fee schedules. The FDIC’s guidance on re-presentment NSF fees addresses the lookback period for restitution and states in a footnote that “institutions with challenges readily accessing accurate ACH data that self-correct this issue and provide restitution to harmed customers, as appropriate, for transactions occurring two years before the date of this Financial Institution Letter will generally be considered as having made full corrective action.” If your institution cannot readily access ACH data on re-presentments, you may use a two-year lookback period, measured from the date of the FDIC’s Financial Institution Letter (August 18, 2022).

Also, if your institution can access data on re-presentments that is reasonably available, we recommend considering a longer lookback period. The FDIC states that it “will consider an institution’s record keeping practices and any challenges an institution may have with retrieving, reviewing, and analyzing re-presentment data, on a case-by-case basis” and “[f]ailing to provide restitution for harmed customers when data on re-presentments is reasonably available will not be considered full corrective action.”

For resources related to our guidance, please see:

  • FDIC FIL-40-2022, Supervisory Guidance on Multiple Re-Presentment NSF Fees, page 4, footnote 4 (August 18, 2022) (“In recent examinations, the FDIC has identified instances where institutions have been unable to reasonably access accurate ACH data for re-presented transactions beyond two years. In these cases, the FDIC has accepted a two-year lookback period for restitution. The FDIC expects supervised institutions to promptly address this issue. Institutions with challenges readily accessing accurate ACH data that self-correct this issue and provide restitution to harmed customers, as appropriate, for transactions occurring two years before the date of this Financial Institution Letter will generally be considered as having made full corrective action.”)
  • FDIC FIL-40-2022, Supervisory Guidance on Multiple Re-Presentment NSF Fees, pages 3–4 (August 18, 2022) (“In addition, in determining the scope of restitution, the FDIC will consider an institution’s record keeping practices and any challenges an institution may have with retrieving, reviewing, and analyzing re-presentment data, on a case-by-case basis, when evaluating the time period institutions utilized for customer remediation. Failing to provide restitution for harmed customers when data on re-presentments is reasonably available will not be considered full corrective action.”)