Imposition of Charges on Returned Payment Instruments

THE CHIEF EXECUTIVE OFFICER RECOMMENDS:

That the Board of Education ("Board") amend Board Report 3-1119-PO01, Imposition of Charges on Returned Payment Instruments.

PRESENT POLICY: Board Report 3-1119-PO01, Section 403.7, Adopted November 19, 2003

DESCRIPTION

The Chicago Board of Education ("Board") and individual Chicago Public Schools ("CPS") receive payment instruments under a variety of circumstances including, but not limited to: health insurance payment under COBRA and Section 125; registration fees for professional development seminars; usage fees; and student fees. The Board and the individual schools are charged fees by the bank for every payment instrument that is returned for any reason.

POLICY TEXT:

Whenever a payment instrument is not honored by the bank due to insufficient funds, closed account, refer to maker, or for any reason whatsoever, the Board or the individual school may charge the account holder, person or entity receiving the benefit derived from the instrument, including but not limited to CPS students and/or their parents/guardians, CPS school internal accounts, CPS personnel, CPS vendors and all other payment issuers, a $34.00 processing fee in addition to the amount of the check to recover the bank fee(s) and any other processing costs pursuant to Chapter 2-32-070 of the Municipal Code of the City of Chicago. In collecting the $34.00 processing fee and the payment instrument amount, along with any additional incurred costs, the Board or the individual school shall take no actions that violate the Illinois Wage Payment and Collection Act, 820 ILCS 115/9, or other applicable Illinois or federal law. This policy shall be made known to the payment instrument makers by the school or department accepting personal or corporate checks or other payment instruments. Schools should follow the procedures for handling returned checks as defined in the Insider’s Guide to School Business and Internal Accounts Manual.

Reasonable cause standards for waiver of fees on returned unpaid instruments shall be guided by the following principles with questionable determinations to be made by the CPS Controller or school principal if they are recipients of the returned payment. "CPS Policy 408.1 Waiver of School Fees" should be referenced for guidance when determining if students are eligible to waive school fees.

Failing to properly complete an instrument by not fully executing the payment with all appropriate authorization details will not qualify for consideration of waiver of returned unpaid instrument fees.

When any unpaid returned instrument fee is resolved either through payment, replacement of the original instrument, or waiver, whenever possible, the original will be returned to the account holder and a copy will be maintained by the CPS department or school.

This policy does not limit CPS' ability to file a police report for deceptive practices as defined by 720 ILCS.