After my bank froze my account, some of my checks were returned unpaid. Is the bank permitted to impose an insufficient funds or “NSF” fee for these returned checks?

Generally, if permitted by your Deposit Account Agreement, the bank is permitted to charge these fees. However, if you receive certain Federal benefits payments by direct deposit, the bank may be required to protect at least some of that money automatically, so that money should not be frozen,  and you should be able to access it. If the funds in your account are not automatically protected, these funds may be frozen and checks may be returned.

If you believe the bank charged you an insufficient funds fee when it should have automatically protected funds in your account, you should contact the bank. You can also file a written complaint with the OCC’s Customer Assistance Group. If your account includes other Federal benefit payments that are not automatically protected, such as a Federal benefit that you deposit by check, ask your bank if it will refund – or not charge – fees in connection with a freeze on the account.

September 2019