---
title: "Returned-payment (NSF) fee: definition | Desert Rock Capital"
url: "https://www.desertrockcapital.com/glossary/returned-payment-fee"
description: "Under the Truth in Lending Act (Regulation Z), a returned-payment fee is 'any fee imposed by the creditor for a returned payment.'"
---

Loan costs

# Returned-payment (NSF) fee
All lending terms
Definition

Under the Truth in Lending Act (Regulation Z), a returned-payment fee is "any fee imposed by the creditor for a returned payment."

A returned-payment fee is assessed when your payment does not successfully process, for example when a check bounces or an ACH automatic withdrawal is returned for non-sufficient funds (NSF), a closed account, or stopped payment. The lender or biller may charge a flat fee disclosed in the agreement, and your own bank may separately charge an NSF or overdraft fee for the same returned item. Because the payment did not clear, the underlying amount typically remains due, and a late fee may also apply if the payment is now past its due date. The conditions and amount of a returned-payment fee are set in the loan or account agreement.

Source: [Truth in Lending Act (Regulation Z), 12 CFR 1026.6(b)(2)(xi)](https://www.law.cornell.edu/cfr/text/12/1026.6). This definition is general educational information, not legal or financial advice.
Related

- [Late fee](/glossary/late-fee)
- [ACH and auto-pay](/glossary/ach-auto-pay)
- [Loan FAQs](/faqs)
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