This Courtesy Pay Disclosure (“Disclosure”) sets forth the applicable terms and conditions when you (the credit union) will pay overdrafts in my checking account and charge me a fee. It is referred to as a “Courtesy Pay” program. “Overdraft” means there are not sufficient available funds in my account to pay for a transaction, but the transaction is paid under the Courtesy Pay program, which results in a negative (or “overdraft”) balance. “Non-sufficient funds” transactions are check or pre-authorized transfer transactions that are presented to you for payment on my checking account when my account lacks sufficient collected or available funds to pay such transaction, and that are returned unpaid. You retain the discretion to either: (1) return such non-sufficient funds transactions unpaid and charge an associated Overdrawn fee; or (2) pay such transactions that are presented when my account lacks sufficient collected or available funds under the Courtesy Pay program, resulting in an overdraft, and to charge an associated Courtesy Pay fee. Non-sufficient available funds or an overdraft transaction may result from: A) The payment of checks, electronic funds transfers or other withdrawal requests; B) payments authorized by me; C) The return, unpaid, of items deposited by me; D) The imposition of applicable service charges; or E) the deposit of items, which, according to the credit union’s Funds Availability Policy, are treated as not yet “available” or finally paid. If you pay for an overdraft, I will be charged a fee as described in your Schedule of Fees and charges. The Overdrawn or Courtesy Pay fees are described in our Schedule of Fees and Charges, which is updated periodically.
Please note that for ATM and one-time debit card transactions, I must affirmatively consent to this coverage. Without my consent, you may not authorize and pay an ATM or one-time debit card transaction that will result in insufficient available funds in my account.
This Courtesy Pay Disclosure includes important information regarding my account balance, how transactions are posted to my account, and when a Courtesy Pay fee will be charged. I should read these disclosures carefully. If I have questions, I will see a branch representative or call 1-858-495-3400.
MY CHECKING ACCOUNT BALANCE. My checking account has two kinds of balances: the “actual” balance and the “available” balance. Both can be checked when I review my account online, at an ATM, by phone, or at a branch. It is important to understand how the two balances work so that I know how much money is in my account at any given time. This section explains actual and available balances and how they work.
My actual balance is the amount of money that is actually in my account at any given time, but not all funds included in the actual balance are considered available for transactions on my account. It reflects transactions that have “posted” to my account, but not transactions that have been authorized and are pending. While the term “actual” may sound as though the number I see is an up-to-date display of what is in my account that I can spend, that is not always the case. Any purchases, holds, fees, other charges, or deposits made on my account that have not yet posted will not appear in my actual balance. For example, if I have a $50.00 actual balance, but I just wrote a check for $40.00, then my actual balance is $50.00 but it does not reflect the pending check transaction. So at that point, I actually have $50, but I have already spent $40.
My available balance is the amount of money in my account that is available to me to use without incurring a Courtesy Pay fee. The available balance takes into account things like holds placed on deposits and pending transactions (such as pending debit card purchases) that you have authorized but that have not yet posted to my account. For example, assume I have an actual balance of $50 and an available balance of $50. If I were to use my debit card at a restaurant to buy lunch for $20, then that merchant could ask you to pre-authorize the payment in that amount (or even in a different amount). Under this example, if the merchant requested preauthorization in the amount of $20, you will place a “hold” on my account for $20 (referred to as the authorization hold). My actual balance would still be $50.00 because this transaction has not yet posted, but my available balance would be $30 because of the restaurant’s preauthorization request that resulted in an authorization hold of $20 on my account. When the restaurant submits its bill for payment (which could be a few days later and for a different amount than the amount of the authorization hold), you will post the transaction to my account and my actual balance will be reduced by the amount of the posted transaction.
Available balance is used to determine when my account is overdrawn. The following example illustrates how this works:
Again, assume my actual and available balance are both $50, and I swipe my debit card at a restaurant for $20. If the restaurant requests preauthorization in the amount of $20, an authorization hold is placed on $20 in my account, so my available balance is only $30. My actual balance is still $50. Before the restaurant charge is sent to you for processing, a check that I wrote for $40 clears. Because I have only $30 available (due to the authorization hold of $20), my account will be overdrawn by $10, even though my actual balance is $50. In this case, you may pay the $40 check, but I will be charged a Courtesy Pay fee. That fee will be deducted from my account, further reducing the balance.
My account is considered overdrawn when the available balance in my account is negative (less than $0). It is very important to understand that I may still overdraw my account even though the available balance appears to show there are sufficient funds to cover a transaction that I want to make. This is because my available balance may not reflect all my outstanding checks and automatic bill payments that I have authorized, or other outstanding transactions that have not been paid from my account.
In the example above, the outstanding check will not be reflected in my available balance until it is presented to you and paid from my account.
In addition, my available balance may not reflect all of my debit card transactions. For example, if a merchant obtains your prior authorization but does not submit a one-time debit card transaction for payment within three (3) business days of authorization (or for up to thirty (30) business days for certain types of debit card transactions), you must release the authorization hold on the transaction. The available balance will not reflect this transaction once the hold has been released until the transaction has been received by you and paid from my account. Additional information regarding how authorization holds affect my account’s available balance can be found in the “Signature Debit Card Transactions” provision below.
HOW TRANSACTIONS ARE POSTED TO MY ACCOUNT. There are basically two types of transactions in my account: credits or deposits of money into my account, and debits or payments out of my account. It is important to understand how each is applied to my account so that I know how much money I have and how much is available to me at any given time. This section explains generally how and when you post transactions to my account.
- Credits. Most deposits are added to my account when you receive them. For some checks I deposit, only $200 will be made available at the time of deposit; the balance will be available two (2) business days later. There may be extended holds on checks over $5,000. Thus, my available balance may not reflect the most recent deposits to my account. For details on the availability for withdrawal of my deposits, see the section of my Membership Agreement & All-in-One Disclosure entitled “Funds Availability Policy and Disclosure.”
- Debits. There are several types of debit transactions. Each type of debit transaction is described generally below. Keep in mind that there are many ways transactions are presented for payment by merchants, and you are not necessarily in control of when transactions are received.
- Checks. When I write a check, it is processed through the Federal Reserve system. You receive data files of cashed checks from the Federal Reserve each business day. The checks drawn on my account are compiled from these data files and paid each day. You process the payments by draft number, from low check number to highest.
- ACH Payments. You receive data files every business day from the Federal Reserve with Automated Clearing House or ACH transactions. These include, for example, automatic bill pays I have signed up for. Each day, ACH transactions for my account are grouped together and paid by the sequence number assigned by the Federal Reserve.
- Point of Sale (POS) Debit Card Transactions. These are transactions where I use my debit card and I enter my PIN number at the time of the sale. They are similar to ATM withdrawals because money is usually deducted from my account immediately at the time of the transaction. However, some POS transactions are not presented for payment immediately; it depends on the merchant.
- Signature Debit Card Transactions. These are transactions where I make a purchase with my debit card and I do not enter my PIN but instead am asked to sign for the purchase. As described above, in these situations, the merchant may seek priorauthorization for the transaction. When that happens, you commit to making the requested funds available when the transaction finally posts and as such, you generally place a temporary hold against the available funds in my account. You refer to this temporary hold as an “authorization hold,” and the amount of the authorization hold will be subtracted from my available balance. Authorizations are deducted from my available balance but not my actual balance as they are received by you throughout each day. At some point after I sign for the transaction, it is processed by the merchant and submitted to you for payment. This can happen hours or sometimes days after I signed for it, depending on the merchant and its processing company. Until the transaction finally settles or you otherwise remove the hold (for example, you may remove the hold because it exceeds the time permitted, or you determine that it is unlikely to be processed), the funds subject to the hold will not be available to me for any other purposes. These payment requests are received in real time throughout the day and are posted to my account as they are received. Please note: the amount of an authorization hold may differ from the actual payment because the final transaction amount may not yet be known to the merchant when the authorization request is submitted. For example, if I use my card at a restaurant, a hold will be placed in the amount of the bill presented to me, but when the transaction posts it will include any tip that I may have added to the bill. This may also be the case where I swipe my debit card at gas stations and hotels and other retail establishments. For these types of transactions, there may be no authorization hold, or the amount of the authorization hold may be different form the transaction amount. You cannot control how much a merchant asks you to authorize, or when a merchant submits a transaction for payment. You are permitted to place an authorization hold on my account for up to three (3) business days (or up to thirty (30) business days for certain types of debit card transactions) from the time of the authorization or until the transaction is paid from my account. However, if the transaction is not submitted for payment, you will release the authorization hold, which will increase my available balance until the transaction is submitted for payment by the merchant and finally posted to my account. If this happens, you must honor the prior authorization and will pay the transaction from my account. In certain instances, when the amount of the authorization hold is either more or less than the amount of the actual transaction, you may maintain the authorization hold even after the purchase amount is actually paid from my account. However, in these instances, you will not maintain an authorization hold for longer than three (3) business days (or for up to thirty (30) business days for certain transactions).
This is a general description of how certain types of transactions are posted. These practices may change and you reserve the right to pay items in any order you chose as permitted by law.
You may receive multiple deposit and withdrawal transactions on my account in many different forms throughout each business day. This means that I may be charged more than one Courtesy Pay fee if you pay multiple transactions when my account is overdrawn.
The best way to know how much money I have and avoid paying overdraft fees is to record and track all of my transactions closely.
You are not obligated to pay any item presented for payment if my account does not contain sufficient available funds. Rather than automatically returning, unpaid, any non-sufficient funds items that I may have, if my eligible account (primary used for personal and household purposes) has been open for at least ninety (90) days and thereafter I maintain my account in good standing, which includes at least: (A) I am not in default on any loan obligation to you, (B) I bring my account to a positive balance (not overdrawn) at least once every thirty (30) days, and (C) my account is not the subject of any legal or administrative order or levy, you will consider, without obligation on your part, approving my reasonable overdrafts. This discretionary* service will generally be limited to $300, $500, or $750 (depending on type of account) overdraft (negative) balance for checking accounts. Of course, any and all fees and charges, including without limitation our Overdrawn/Courtesy Pay fees (as set forth in your Schedule of Fees and Charges) will be included in this limit and will apply to any transaction that overdraws my account or any non-sufficient funds transactions including, but not limited to, payments authorized, checks, ACH/Electronic Items, Debit Card/Check Card’s, POS, Internet Banking/Online Banking and Telephone Banking Transactions.
You may refuse to pay an overdraft for me at any time, even though my account is in good standing and even though you have previously paid overdrafts for me. You have no obligation to notify me before you pay or return any item. The amount of any overdraft plus any applicable Overdrawn and/or Courtesy Pay fees that I owe you shall be due and payable upon demand. If there is an overdraft paid by you on an account with more than one (1) owner on the signature card, each owner, and agent if applicable, drawing/presenting the item creating the overdraft, shall be jointly and severally liable for such overdrafts plus our applicable Overdrawn and/or Courtesy Pay fees.
Limitations: Available only to eligible personal checking and sole proprietor accounts, primarily used for personal household and small business purposes. Checking accounts for ages 18-23 years old, Business type Accounts except Sole Proprietor, Savings Type Accounts, Money Market Accounts, and Public Fund/Charitable Organization Accounts not eligible. You may limit the number of accounts eligible for Courtesy Pay.
*The Courtesy Pay service does not constitute an actual or implied agreement between me and you, nor does it constitute an actual or implied obligation of or by you. This service represents a purely discretionary courtesy overdraft that you may provide to me from time to time and which may be withdrawn or withheld by you at any time without prior notice or reason of cause. I may elect to Opt-out of this service at any time by contacting the call center at 1-858-495-3400.
Accounts not eligible for Courtesy Pay include;
- Accounts with a loan past due for more than 10 days
- Accounts that had three or more returned deposited items is a year
- Accounts that have an invalid or incorrect address on file
- Dormant Accounts and accounts flagged for bankruptcy, charge-offs, liens, levies, or garnishments are not eligible.
IF I DO NOT UNDERSTAND THIS DISCLOSURE OR HAVE ANY QUESTIONS, I MAY CONTACT YOU AT 1-858-495-3400, MONDAY THROUGH FRIDAY, 7 AM TO 6 PM AND SATURDAY, 9 AM TO 4 PM PACIFIC TIME