What You Need to Know About Overdraft Privilege Opt-In
Effective July 1, 2010 for new accounts and prior to August 15, 2010 for existing accounts, Federal Regulations require members who are eligible for overdraft protection, FORUM’s Overdraft Privilege program, to opt-in to have their ATM and everyday debit card transactions covered, even if they have been covered in the past. Below are answers to frequently asked questions.
What is Overdraft Privilege?
An overdraft occurs when you make a purchase or ATM transaction, but you don’t have enough money in your account to cover the transaction. With Overdraft Privilege, we may allow debit card and ATM authorizations to be approved even if there isn’t enough money in your account at the time of purchase. Each time you overdraw your account, and we cover your withdrawal, we charge our customary overdraft fees.
What are the benefits of Overdraft Privilege?
Convenience – May allow your debit card purchases to be approved when you have insufficient funds.
Flexibility – May allow you to make a purchase or withdraw cash even if you can’t make a deposit or transfer money until later.
Safety Net – May cover you if you have an unexpected expense.
Peace of Mind – If you don’t use it, there is no cost to you.
How do the regulatory changes to Overdraft Privilege impact me?
Regulatory changes require you to opt-in to the program in order to be covered, even if you have been covered in the past. Instructions on how to opt-in will be available prior to August 15, 2010 through communication via CU Online and/or mail.
When will these changes go into effect?
FORUM is working diligently to comply with the new regulations and will provide members with the opportunity to "opt-in" prior to August 15, 2010.
What will happen if I don’t “opt-in” to Overdraft Privilege?
If a member elects not to authorize FORUM to pay overdrafts on their ATM and everyday debit card transactions, certain transactions may be denied specifically day-to-day debit card transactions like paying for groceries.
How do I make the selection to "opt-in"?
You can make a selection through CU Online, by phone, or by visiting any FORUM Branch location. To print and fill out an opt-in consent form before going to the branch, click here.
Why would I want the credit union to cover an ATM withdrawal or everyday debit card transaction if I don't have the money in my account?
There may be times when you need extra money for unforeseen events such as your car breaking down or sudden medical expenses. In situations like these, even if funds are not available in your account, the credit union may still authorize your transaction under our Overdraft Privilege program.
Let’s look at a few scenarios:
Debbie lives on a budget and doesn’t have extra money to spare. Her paycheck is directly deposited into her account every Friday. She was planning to go out of town for the weekend; however, while at the ATM trying to withdraw cash for her trip, she learns her check was never deposited! Now her plans are ruined.
On his way to work, Chris’s car breaks down. He needs to get it fixed immediately but is unable to use his debit card because he doesn’t have funds in his account to cover the transaction. Now he has to rely on a friend to drive him to work until his next payday.
Had these members opted-in to Overdraft Privilege for ATM and everyday debit card transactions, these situations could have been avoided. Even though they did not have sufficient funds in their accounts, their transactions may have been accepted.
What other options besides Overdraft Privilege do I have?
Transfer from another account:
If you have other accounts with us, you can authorize us to transfer the funds needed to cover your overdraft for a small fee
A line of credit is available to cover overdrafts. This service requires you to complete an application
and approval is based on your credit worthiness. The amount of your limit varies, and there is a small fee
for overdrafts from the line.
What is the difference between Overdraft Privilege and Non-Sufficient Funds (NSF)?
Overdraft Privilege is when the credit union covers the amount of the transaction that you do not have the funds to cover and allows your account to go negative temporarily. An NSF is when you do not have the funds to cover the full amount of the transaction, and we return the item unpaid.
What is the best way for me to manage my account to prevent incurring fees?
FORUM offers several services that allow daily monitoring of your account. Our online banking service, CU Online, not only lets you check balances and transfer funds, it also allows you to set-up email alerts of balances, when items clear the account, and more. With Tellerphone you have access to your accounts 24 hours a day via phone to check balances, transfer funds between accounts, inquire about deposits and withdrawals, and more.
Why does FORUM assess fees for Overdraft Privilege and Non-Sufficient Funds?
All financial institutions have to pay for the services it provides to customers such as check processing and ATM network fees. There is also risk and costs associated with allowing members to take their accounts negative. As a not-for-profit financial institution we constantly review our fees and cost of services to ensure all members are equally sharing in the cost of services we provide. It is important to note that less than 10% of our members utilize these specific services and actually incur the fees.
What order does FORUM post debit card transactions to my account?
Debit Card Point of Sale/PIN based and ATM transactions happen at the time they occur.
Signature Based Debit Card transactions are preauthorized at the time they occur and then post to the account when the merchant sends it through at a later time.
If you have any other questions related to overdraft protection and the new regulations, please contact us via online chat or through CU Online email.