Sure they could. Just make sure you are not charging fees that could be deemed unconscionable. All fees should be independently set by the bank based on market competition and costs to provide the service. In your example, I would have to ask why it is more expense for you to return a check than it is to pay a check into the overdraft considering the risk of the overdraft never being repaid? I'm not saying it is wrong, it is just the sort of thing that would have to be examined and documented.