If a bank charges an NSF fee on items that are paid as a courtesy, does it need to send a notice to the customer? The bank discloses that they may choose to pay such items at their discretion, the fee is disclosed on the fee schedule, and the customer is provided with the periodic statement that would show any fees assessed. Any thoughts?

We've had this discussion before and I recall no cite which even required an NSF notice to be sent, regardless of whether the item was paid or returned.

Certainly it is a customer service convenience. If I had a problem I would want to be notified of it right away.

You will have a less busy customer service department by sending notices, you will end up refunding less, etc. We will have image NSF notices very soon where the customer receives an image of the check causing the NSF and we feel this will also reduce phone calls.