Frequently the topic of pursuing or threatening criminal charges against a customer who has defaulted on a loan via a Non-Sufficient Funds check or ACH debit comes up as I work with CAB Consulting clients. My understanding has always been that unless the customer is guilty of outright fraud that you cannot pursue criminal charges, go to Sherrif’s hot check division, etc. “Outright fraud” would be an umbrella term for forgery, fraud, theft, or other criminal conduct.

On October 14th, the OCCC released an Advisory Bulletin on this subject that makes some important clarifications. OCCC noted that there must be specific evidence of criminal conduct, intent to commit a criminal act, the consumer must have knowingly or intentionally violated criminal law, and that these criteria would need to be proven beyond a reasonable doubt. Pursuing consumers who did not exhibit any of these behaviors would be a violation of Texas Finance Code and the Texas debt Collection Act.

NSF checks and NSF ACH debit returns simply are not something we can pursue criminal charges on. If the OCCC feels this issue is worthy of an Advisory Bulletin then I am confident that research of this activity will be added to the examination checklist.

See below for a link to the Advisory Bulletin. As always, feel free to call or email Michael Brown at CAB Consulting. 214-293-8676 or Michael@CreditAccessBusiness.com.

OCCC.CAB.Criminal.Charges.Bulletin