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| ## Comptroller of the Currency                                        |
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| > Administrator of National Banks                                     |
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Washington, DC 20219

##### Interpretive Letter #1055

August 2, 2005 **March 2006**

**12 USC 24(7)**

Richard Blumenthal

Attorney General

State of Connecticut

55 Elm Street, P.O. Box 120

Hartford, CT 06141-0120

Dear Attorney General Blumenthal:

Thank you for your letter concerning a complaint you received from a
Connecticut resident. The complaint concerns fees charged by a national
bank for cashing a check presented for payment by a non-accountholder
that is drawn upon the account of one of the bank's customers. Fees a
bank charges for cashing a check presented by a non-accountholder are
sometimes described as convenience fees charged for the service of
making funds immediately available to non-customers. The fees also are
referred to as "on-us check cashing fees" or "on-us fees." I appreciate
this opportunity to explain national banks' authority to charge such
fees.

The OCC has issued several letters explaining that Federal law
authorizes national banks to charge on-us fees.[^1] As these letters
describe, a Federal statute, 12 U.S.C. § 24(Seventh), authorizes
national banks to engage in activities that are part of, or incidental
to, the business of banking, as well as to engage in certain specified
activities listed in the statute. Cashing checks is part of the business
of banking. A national bank's authority to provide products or services,
such as check cashing, to its customers encompasses the ability to
charge a fee for the product or service.[^2] This authority to charge
fees for services is expressly set forth in the OCC's regulations at 12
C.F.R. § 7.4002, and our interpretive letters concluded that on-us fees
are included in this authority.

That conclusion was subsequently upheld by the U.S. Court of Appeals for
the Fifth Circuit. In a case concerning the applicability to national
banks of a Texas statute prohibiting on-us fees, the Fifth Circuit
confirmed that the OCC had the authority to determine that Federal law
authorized a national bank to charge such fees and expressly upheld the
OCC's determination. Moreover, the appeals court affirmed the lower
court's decision that the Texas statute prohibiting on-us fees was
preempted by Federal law. As the Fifth Circuit's decision thus makes
clear, state statutes that prohibit the fees do not apply to national
banks.[^3]

I trust this explanation is helpful in understanding national banks'
authority to charge on-us fees. If you have any further questions,
please do not hesitate to contact me or Michele Meyer, an attorney on my
staff, at (202) 874-5090.

Sincerely,

signed

Julie L. Williams

Acting Comptroller of the Currency

[^1]: OCC Interpretive Letters Nos. 932, 933, and 934 (May 2002). These
    letters are publicly available on the OCC's website at
    [www.occ.treas.gov/interp/monthly.htm]{.underline}.

[^2]: *See Bank of America, N.A. v. City and County of San Francisco*,
    309 F.3d 551 (9^th^ Cir. 2002), *cert. denied*, 123 S. Ct. 2220
    (2003) (city ordinances prohibiting ATM fees held preempted and
    permanently enjoined); *Metrobank v. Foster*, 193 F. Supp. 2d 1156
    (S.D. Iowa 2002) (national bank authority to charge fees for ATM use
    preempted Iowa prohibition on such fees). *See also Bank One v.
    Guttau*, 190 F.3d 844 (8^th^ Cir. 1999) (various restrictions on the
    operation of ATMs imposed by Iowa law held preempted and permanently
    enjoined).

[^3]: *Wells Fargo Bank of Texas, N.A. v. James*, 321 F.3d 488 (5^th^
    Cir. 2003), *aff'g* 184 F. Supp. 2d 588 (W.D. Tex 2001).