Email Subj: Can business accounts pay a higher overdraft fee than consumer accounts?

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Question:

We have significantly reduced our overdraft fee pricing for consumer checking accounts. However, we have left the business account pricing alone. This is OK, right, since the focus of unfair overdraft fees has been on consumer protection?

Answer:

Not entirely. Since the Overdraft Fee issue is, at its root, a UDAP issue, this hits to the big question of whether or not FTC’s Section UDAP rule is solely a consumer protection rule, or applies business commerce too. If you are supervised by the FDIC, the answer is clear: UDAP applies to both consumer AND businesses customers. What?! Yes, the FDIC Exam Manual for UDAP references an FTC court decision that decided UDAP applies to business accounts too. This is an important risk-management issue to learn more about!
Join the upcoming webinar “Junk Fee Crack Down” on Tuesday, April 30, 2024 to learn more!
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Learn more about Rebekah Leonard’s
Junk Fee Crack Down
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