No question, getting your denied debit card back from an apologetic cashier can be embarrassing. And in an emergency situation—you’re stranded and need a taxi or a tow, for example—having the funds you need may even help you stay safe. Overdraft protection can ensure you have the money you need when you need it, even when the cash in your account is a little low. However, new federal regulations are changing overdraft protection services, and action on your part may be necessary.
Overdraft protection—under GHCU’s “Courtesy Pay” program—is a discretionary service GHCU provides for eligible members. If, for example, a member makes a purchase for $100 but only has $50 in his or her checking account, GHCU may honor this purchase, allowing the checking account to go negative, to a maximum of $700. Overdraft fees may be levied for each occurrence. See our rates and fees schedule for more information on fees.
Currently, overdraft protection is automatic for eligible GHCU members who have not chosen to opt out of the program. Federal regulations take effect July 1, 2010, and prior to August 15, 2010, members who want and are eligible for overdraft protection will need to opt in to the program in order to be covered, even if they have been covered in the past.
GHCU has made no changes to its Courtesy Pay program at this point; however, to comply with the new regulation, we will soon be contacting eligible members who have a GHCU checking account with more information about this change and providing them with an opportunity to specify their overdraft protection preference. Those who opt in will continue to receive overdraft protection—at the discretion of the credit union—as long as they remain eligible. For eligibility requirements, please see our Membership & Account Agreement.
If a member elects not to opt-in for this overdraft protection, certain transactions may be denied: specifically, any time a member uses his or her debit card for day-to-day purchases (for example, buying groceries) and ATM transactions (for example, withdrawing cash) but does not have sufficient funds in his/her account. In this case, the request for funds may be denied. Checks and automatic bill payments are not covered by this regulatory change; however, such payments may still be covered through other overdraft protection services you have with us.
To ensure that your preference is recorded quickly and appropriately, if you have a GHCU checking account, please watch your GHCU account statements for your opportunity to opt in for overdraft protection. For more information on the new overdraft rules, you can visit the website of the Board of Governors of the Federal Reserve System.
Filed under: Financial News and You, Money management tips by Shannon
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