What Can A Dealer Charge for NSF?


What do I charge?  There seems to be a lot of different amounts that businesses in Texas charge for a returned check or payment.  What used to be $25 is now $30 and sometimes $35 or higher.  The answer is $30 maximum.  Per the Texas Business and Commerce Code, the maximum fee is $30. No interest or late charge may be assessed on the fee itself.

Texas Business and Commerce Code, Section 3.506 provides as follows:

3.506.  PROCESSING FEE BY HOLDER OF PAYMENT DEVICE.  (a)  For purposes of this section, "payment device" means any check, item, paper or electronic payment, or other payment device used as a medium for payment.

(b)  On return of a payment device to the holder following dishonor of the payment device by a payor, the holder, the holder's assignee, agent, or representative, or any other person retained by the holder to seek collection of the face value of the dishonored payment device may charge the drawer or indorser a maximum processing fee of $30.

(c)  A person may not charge a processing fee to a drawer or indorser under this section if the fee has been collected under Article 102.007(e) or 102.0071, Code of Criminal Procedure.  If a processing fee has been collected under this section and the holder subsequently receives a fee collected under Article 102.007(e) or 102.0071, Code of Criminal Procedure, the holder shall immediately refund the fee previously collected from the drawer or indorser.

(d)  Notwithstanding Subtitle B, Title 4, Finance Code, or any other law, a contract made under Subtitle B, Title 4, Finance Code, may provide that on return of a dishonored payment device given in payment under the contract, the holder may charge the obligor under the contract the processing fee authorized by this section, and the fee may be added to the unpaid balance owed under the contract.  Interest may not be charged on the fee during the term of the contract.

(e)  This section does not affect any right or remedy to which the holder of a payment device may be entitled under any rule, written contract, judicial decision, or other statute.


There have been no comments made on this article. Why not be the first and add your own comment using the form below.

Leave a comment

Commenting is restricted to members only. Please login now to submit a comment.