Friday, June 30, 2017

Massachusetts Dishonored Check Fee Set at Maximum of $7.23, Goes Into Effect on July 1

The state of Massachusetts set the maximum dishonored check fee that state-chartered banks and credit unions may assess at $7.23. This fee will go into effect on July 1, 2017.

The 2017 deposit return items (DRI) fee is based upon deposit return item cost data from a sample of state-chartered banks and credit unions.

The state surveyed 72 financial institutions. The sample was evenly divided between banks and credit unions.

The cost of processing deposit returned items ranged from $1.21 to $30.38 per item with a median cost of $7.23.

The survey found that credit unions had a higher average cost of processing dishonored checks than banks -- $9.35 versus $7.43.

Unfortunately, this state-mandated price control will cause half of the state's institutions to incur a loss in processing dishonored checks.

This is bad public policy.

Read the decision.


  1. Cost is irrelevant because it is not a service. It is a penalty enforced with enough pain to change the behavior. It is fraud to write a bad check.

    Now, Mass banks/cus will bounce ALL bad checks. Consumers will pay fee on both ends plus default on payments. Overwhelming majority of bad checks are accidental, consumers benefit from bank feeing but then honoring the check. This new rule will eliminate that help for protecting the majority from a rare accident in order to add protection for the minority repeat offenders from themselves. They will not stop their habit, then account will be closed and reported to Check Systems.

    Another Govt achieved unintended consequence with no accountability. They should have simply required that any account must be closed and reported if the total number of ODs for the past 9 months exceeds some limit.

  2. Sounding naive here but is a dishonored check one that a consumer bounces or a deposit attempt where, when the cu or bank attempts to access the funds, the funds are not there or not released?

  3. The deposit return item is a check that has been returned to a depositor because it could not be processed against the check originator's account.



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