Return Fee and a Late Fee?

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Question:

If a loan customer's automatic payment from another bank is returned to us NSF can we charge a returned item fee to the loan and then add on a late charge if the loan payment becomes delinquent?

Answer:

Yes, unless prohibited by State law. However, prior to charging the fee you would have to include this charge in the loan contract. The late fee is a separate issue and if disclosed properly, a separate late fee could also be assessed.

First published on BankersOnline.com 1/2/07