April 13, 2026
FDCI Rescinds FIL 32-2023 on Re-presented Checks
The MBA is pleased that the FDIC has rescinded FIL 32-2023, on the subject of overdraft charges on re-presented checks. This action by the agency marks the end of a long, determined, and successful legal effort by the MBA.
As you recall, the MBA and Lake Central Bank filed a lawsuit against the FDIC, claiming that FIL 32-2023 (the FIL) was an unlawful rulemaking. Specifically, we claimed that the FIL was a legislative rule disguised as a guidance document. We had two goals when we filed that lawsuit. First, we wanted to stop the FDIC from enforcing this rule against FDIC-supervised banks. Second, we wanted the courts to order the FDIC to rescind the FIL.
The FDIC defended our lawsuit by stating that the FIL was simply a guidance document, not a legislative rule. Legally, there are major distinctions between these two types of government agency issuances. A legislative rule has the force and effect of law, and the agency issuing it must follow the full notice and comment rulemaking process. Guidance documents do not have the force and effect of law, and they cannot be enforced by the issuing agency.
The FDIC had a challenge with making the argument that the FIL was just a guidance document because the agency had been aggressively enforcing the rule. So, the FDIC made a strategic choice to stop enforcing the UDAP violation that was outlined in the FIL. Immediately after we filed our lawsuit, the FDIC changed their enforcement position on this issue from aggressive enforcement to no enforcement whatsoever.
The FDIC attorneys then testified in the trial court that the FIL was just a guidance document and that they would not enforce it against the banks. They did the same thing at the Appeals Court level. After doing so, the FDIC was bound by their word that they would never again enforce the violation outlined in the FIL.
Relying heavily on that testimony, the Courts sided with the FDIC. Since the agency was no longer enforcing the rule, the Courts concluded that the FIL was just guidance. It was not exactly how we envisioned it, but at that point, our lawsuit had effectively stopped the FDIC from enforcing the violation outlined in the FIL. Now, none of the FDIC-supervised banks would need to worry about being examined or cited for that UDAP violation, which was the number one goal in filing our lawsuit.
That result was great, but the MBA staff attorneys wanted more. The FIL was still out there as a guidance document, which seemed wrong. Last November, the MBA staff decided to contact the FDIC, encouraging the agency to rescind the FIL. After much research and discussion, we landed on three arguments we used to support that position.
First, we argued that the premise of the FIL was legally wrong. The FIL is based on a faulty assumption that a bank that charges an overdraft fee for an original presentment and then charges another overdraft fee for a re-presented check is charging more than one fee for “the same transaction.” That premise is incorrect. Under the Uniform Commercial Code, which is the law in all 50 states, a re-presentment of a check is a separate “item.” Under the check processing rules and in practice, a re-presentment is treated as a separate transaction, not an extension of the original presentment. Because the premise of the FIL is legally incorrect, it fails as a guidance document.
Second, we argued that the FDIC’s current enforcement position is inconsistent with the language in the FIL. The FIL’s enforcement language is very aggressive, requiring banks to take certain actions or risk being cited for a UDAP violation. However, the FDIC is no longer requiring banks to take the corrective action steps listed in the FIL and is no longer examining or citing banks for this UDAP violation. The inconsistency between the enforcement language in the FIL and the FDIC’s current enforcement position makes the FIL a flawed guidance document.
One of the FDIC’s original reasons for issuing the FIL was to notify the banks that there were some class action lawsuits regarding re-presented check NSF fees. Our third argument was that keeping the FIL active as a guidance document makes these lawsuits more likely. If a federal banking regulatory agency raises UDAP concerns with a banking practice, it will continue causing more lawsuits than it prevents.
MBA President/CEO Joe Witt led this effort on behalf of the association. He met several times with staff attorneys from the FDIC. He made the arguments above, plus a few others. Joe also had a recent conversation on this matter with FDIC Chairman Travis Hill. Chairman Hill made a presentation to the bankers at the ABA’s Washington Summit in mid-March.
After that speech, Joe approached Chairman Hill and thanked him for everything his agency was doing to reform and right-size bank regulation. He also reminded him that he was working with his staff on the legal and enforcement issues concerning this FIL. Chairman Hill thanked Joe for his work on this issue and stated that the agency was close to resolving this matter. That one-on-one conversation with Chairman Hill ended up being the most impactful part of this advocacy trip to DC.
The MBA thanks the FDIC staff and leadership for listening to our thoughts and concerns regarding this FIL. We are grateful that they took the time to dig into this issue, and we appreciate that they reached the conclusion that rescinding the FIL was the correct thing to do.
The MBA is the Champion for Minnesota Bankers. We work tirelessly to advocate on behalf of our member banks, and we are proud that our efforts continue to produce positive results. We truly could not be happier with how the FDIC resolved this matter.