The Massachusetts Division of Banking has set the maximum fee for dishonored checks (deposit returned items) at $7.17, which was the median cost for a sample of state chartered financial institutions to process deposit returned items. This maximum fee goes into effect on June 1.
Previously, the maximum fee was $6.84 per item.
Massachusetts State Law authorizes the commissioner of banks to annually establish a reasonable fee that compensates a bank or credit union for the direct cost incurred in processing deposit return items.
The fee was determined from cost data of 75 state chartered banks and credit unions. The sample included 38 banks and 37 credit unions.
The cost of processing a deposit return item ranged from $1.21 to $30.38 per item. The average per item cost for banks and credit unions were $7.41 and $9.32, respectively.
Based upon the survey, half of the banks and credit unions will not be able to recoup their cost for processing a deposit return item.
This fee does not seem reasonable to me if a financial institution cannot recoup its cost for processing a dishonored check.
Read the decision.
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