FDIC Beats Minnesota Banks on Insufficient Customer Fund Policy

A federal judge in Minnesota turned aside an industry challenge to guidance from the Federal Deposit Insurance Corp. warning banks against charging multiple fees on the same unpaid transaction for insufficient customer funds.

The guidance in question, Financial Institution Letter 32 issued in June 2023, didn’t constitute a final agency action that was required to go through the full public notice-and-comment process, Judge Paul Magnuson of the US District Court for the District of Minnesota said in a Monday ruling. As a result, the plaintiffs in the suit—the Minnesota Bankers Association and Lake Central Bank—didn’t suffer a harm that ...