Understanding Overdrafts

Term and Conditions Overdraft Addendum-Understanding and Avoiding Overdraft and Nonsufficient Funds (NSF) fees.

This addendum is part of the Terms and Conditions of Your Account.  The information in this addendum is being provided to help you understand what happens if your account is overdrawn.  Understanding the concepts of overdrafts or paid items and nonsufficient funds (NSF) or a return item is important and can help you avoid being assessed fees or charges.  This section also provides contractual terms relating to overdrafts and NSF transactions.

An overdrawn account will typically result in you being charged a paid item fee or return item fee.  Generally, an overdraft occurs when there is not enough money in your account to pay for a transaction, but we pay (or cover) the transaction anyway.  A return item transaction is slightly different.  In a return item transaction, we do not cover the transaction.  Instead, the transaction is rejected and the item or requested payment is returned.  In either situation, we can charge you a fee.

Determining Your Available Balance

We use the “available balance” method to determine whether your account is overdrawn, that is, whether there is enough money in your account to pay for a transaction.  Importantly, your “available” balance may not be the same as your account’s “actual” balance.  This means an overdraft, or an NSF transaction could occur regardless of your account’s actual balance.

Your account’s actual balance (sometimes called the ledger balance) only includes transactions that have settled up to that point in time, that is, transactions (deposits and payments) that have posted to your account.  The actual balance does not include outstanding transactions (such as checks that have not yet cleared and electronic transactions that have been authorized but which are still pending).  The balance on your periodic statement is the ledger balance for your account as of the statement date.

As the name implies, your available balance is calculated based on the money “available” in your account to make payments.  In other words, the available balance takes transactions that have been authorized, but not yet settled, and subtracts them from the actual balance.  In addition, when calculating your available balance, any “holds” placed on deposits that have not yet cleared are also subtracted from the actual balance.

Overdrafts (Paid Item)

You understand that we may, at our discretion, honor withdrawal requests that overdraw your account.  However, the fact that we may honor withdrawal requests that overdraw the account balance does not obligate us to do so later.  So, you can NOT rely on us to pay overdrafts on your account regardless of how frequently or under what circumstances we have paid overdrafts on your account in the past.  We can change our practice of paying, or not paying, discretionary overdrafts on your account without notice to you.  You can ask us if we have other account services that might be available to you where we commit to paying overdrafts under certain circumstances, such as an overdraft protection cash reserve plan or sweep funds from another account you have with us.  You agree that we may charge fees for overdrafts (paid items).  We may use subsequent deposits, including direct deposits of social security or other government benefits, to cover such overdrafts and overdraft fees.  For consumer accounts, we will not charge fees for overdrafts caused by ATM withdrawals or one-time debit card transactions.

Nonsufficient Funds-NSF (Return Item).

If an item drafted by you (such as a check) or transaction you set up (such as a preauthorized transfer) is presented for payment in an amount that is more than the amount of money available in your account, and we decide not to pay the item or transaction, you agree that we can charge you a Return Item Fee for returning the payment.  Be aware that such an item or payment may be presented multiple times and that we do not monitor or control the number of times a transaction is presented for payment.  You agree that we may charge you a Return Item fee each time a payment is presented if the amount of money available in your account is not sufficient to cover the payment, regardless of the number of times the payment is presented.

Payment Types

Some, but not necessarily all, of the ways you can access the funds in your account include debit card transactions, automated clearing house (ACH) transactions, and check transactions.  All these payment types can use different processing systems, and some may take more or less time to post.  This information is important for a number of reasons.  For example, keeping track of the checks you write and the timing of the preauthorized payments you set up will help you know what other transactions might still post against your account.

Balance Information

Keeping track of your balance is important.  You can review your balance in a number of ways including reviewing your periodic statement, reviewing your balance online, accessing your account information by phone, or coming into one of our branches.

Funds Availability

Knowing when funds you deposit will be made available for withdrawal is another important concept that can help you avoid being assessed fees or charges.

A Temporary Debit Authorization Hold Affects your Account Balance

On debit card purchases, merchants may request a temporary hold on your account for a specified sum of money when the merchant does not know the exact amount of the purchase at the time the card is authorized.  The amount of the temporary hold may be more than the actual amount of your purchase.  Some common transactions where this occurs involve purchases of gasoline, hotel rooms, or meals at restaurants.  When this happens, our processing system cannot determine that the amount of the hold exceeds the actual amount of your purchase.  This temporary hold, and the amount charged to your account, will eventually be adjusted to the actual amount of your purchase, but it could be three calendar days, or even longer in some cases, before the adjustment is made.  Until the adjustment is made, the amount of the funds in your account available for other transactions will be reduced by the amount of the temporary hold.

Our current fees are as follows:

Overdraft Paid/Return Items Fees:

Paid Item Fee(s)* ………………………………………… $20.00 per item

Return Item Fee(s)**……………………………………… $20.00 per item

(**each item returned unpaid: A single item can incur a Return Items Fee if

                Re-presented multiple times)

*These fees apply to overdrafts created by check, in-person withdrawal, or reoccurring electronic funds transfer including but not limited to telephone banking, internet banking or bill payment.