Our HELOC agreements allow access by checks and provides for a returned check fee. Is this fee established by state law or can each bank determine what this fee would be? Also if it is not determined by state law, would it be permitted to have different returned check fees on different loan products? My thoughts are that this would end up be confusing to the borrower and not real clear why the bank would want to do this, but I thought I would get a second opinon. Thank you as always!

Those fees are governed by state law.

In IN you can, if you contracted for it, a return check fee up to $20 for checks presented as a payment to the account that was returned for non-payment. However, in IN you cannot contract for nor charge a return check fee for a check written against the HELOC that you return to the payee.

We'll have to check that for our states, thank you. Could there be any possible fair lending issues if the bank wants to charge different returned check fees depending on loan product? I'm not sure I see the benefit, but don't think it would be a problem as long as it is applied consistently among the bank products (meaning all borrowers in the same product would be disclosed the same fee).