Perfectly legal. Went thru this about five years ago when I went to cash a $200 expense reimbursement check at Wells Fargo and they charged me $5. I pointed out that the instrument instructed them to pay me $200, not $195.
Anyway, looked it up in the banking regs and it’s perfectly legal. Unethical, IMO, but legal.
BTW, it applies only for checks that are cashed, not those that are deposited. Which seems odd.
deposit it, then withdraw it
:D