Nonsufficient fund fees
Minnesota Bankers Association v. Federal Deposit Insurance Corporation
Date: Sept. 17, 2025
Issue: Whether the Federal Deposit Insurance Corporation’s (FDIC) Financial Institutions Letter 40-2022: Supervisory Guidance on Multiple Re-Presentment Nonsufficient Funds (NSF) Fees (FIL 40-2022) violates the Administrative Procedure Act (APA).
Case Summary: In a unanimous decision, an Eighth Circuit panel upheld a Minnesota federal court’s dismissal of the Minnesota Bankers Association’s lawsuit challenging the FDIC’s supervisory guidance on NSF fees.
In August 2022, the FDIC issued FIL 40-2022, directing banks that identified issues with re-presentment NSF fees to take corrective action. This included fully reimbursing customers, updating NSF fee disclosures, and helping customers evaluate necessary risk-mitigation measures. Banks were also instructed to monitor activities and customer feedback to ensure effective remediation.
In 2023, the FDIC issued FIL 32-2023 and replaced FIL 40-2022 as the operative guidance. Plaintiffs later sued the FDIC in Minnesota federal court, alleging FIL 40-2022 functioned as a legislative rule because it imposed new legal obligations on banks and committed the agency to enforcement actions under specific circumstances. Plaintiffs claimed the rule constituted an arbitrary and capricious action that exceeded the FDIC’s statutory authority.
The FDIC moved to dismiss, contending plaintiffs could not redress their alleged injuries, FIL 32-2023 was not subject to APA review, and plaintiffs misstated and misapplied the ripeness doctrine. Judge Paul Magnuson of the U.S. District Court for the District of Minnesota granted FDIC’s motion to dismiss, ruling plaintiffs lacked standing because FIL 32-2023 did not constitute a final agency action under the APA.
On appeal, plaintiffs argued FIL 32-2023 qualified as final agency action due to its binding text. Plaintiffs further claimed a redressable procedural injury because FIL 32-2023 is final agency action and thus plaintiffs possessed standing. In response, the FDIC contended plaintiffs lacked standing because their purported past and ongoing substantive injuries either lack concreteness or remain un-redressable.
ABA filed an amicus brief urging the Eighth Circuit to reverse the dismissal, arguing that FIL 32-2023 has legal and practice consequences banks cannot avoid without incurring significant compliance costs, which constitutes a final agency action. ABA emphasized not complying with FIL 32-2023 could result in severe monetary penalties, significant injunctive relief including restrictions on the growth of the bank, and lower CAMELS ratings. ABA also argued the district court’s ruling would permit the FDIC to promulgate improper legal rules without fair process or accountability. Finally, ABA argued that allowing the FDIC to promulgate de facto legislative rules establishing lawful and unlawful behavior under the FTCA is particularly concerning because Congress stripped the FDIC of such authority.
Affirming the district court, the panel ruled plaintiffs’ claims were not ripe for judicial review. The panel explained ripeness depends on “the fitness of the issues for judicial decision and the hardship to the parties of withholding court consideration.” The panel concluded that the issues here were not fit for judicial decision because FIL 32-2023 does not constitute a final agency action subject to review under the APA. An agency action qualifies as “final” only if it marks the “consummation” of the agency’s decision-making process and determines rights or obligations or produces legal consequences.
According to the panel, FIL 32-2023 neither orders a covered institution to take specific action nor declares any particular practice unlawful. Instead, the panel found that FIL 32-2023 merely advised covered institutions about how the FDIC approaches potential violations during examinations and what the institutions can do to reduce their risk of violating the law. The panel emphasized that FIL 32-2023 is not a “definitive statement” of the FDIC’s position, as it does not determine the parties’ rights and obligations, and thus is not an agency action ripe for review.
Judge Grasz concurred, reiterating that agency threats cannot replace the APA’s regulatory framework. He noted the FDIC admitted FIL 32-2023 lacks legal force and is only non-binding guidance on which it does not enforce. Because the court relied on those assurances—that FIL 32-2023 neither compels action nor deems conduct unlawful—he agreed the banks’ claims are not yet ripe.
Bottom Line: Because the panel found that plaintiffs’ claims were not ripe, it did not further address whether plaintiffs possessed standing or their other claims.
Document: Opinion
