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Share Draft Accounts
ABE Federal Credit Union offers to
qualified Credit Union members and their immediate families, three alternatives
to a regular checking account or even a super N.O.W. account at a bank.
Free Basic Checking
Interest Bearing
Deposits:
Deposits to the draft accounts can be made
automatically through payroll deductions, either on an entire net pay (where
available) or fixed amount basis, and by over-the-counter or mail
methods. Payroll deposits and cash or cash equivalent deposits are available for immediate
withdrawal, while other check deposits are subject to regular in-state
or out-of-state clearing period banking regulations. Clearing is processed daily
and transmitted to ABE for posting and acceptance.
Statements:
At the end of each month, a statement, which
includes all the transactions for the month, is prepared by ABE for each member.
Check Copy Retention:
Share draft checks come in duplicate copy form
for automatic record keeping. Every draft check written is automatically
recorded on a carbon less copy. This copy may be used for reconciling the
share draft account to the statement and for tax deduction support. Paid
draft checks will not be returned. Instead, ABE will safeguard paid draft
checks free
of charge for a period of seven (7) years. If a copy is needed as proof of
payment or for tax purposes, it will be provided promptly at a nominal fee
depending on circumstances.
Eligibility:
Share draft accounts are available to any member of
the Credit Union sixteen (16) years old, or more, who maintains membership in
good standing. Minors must show evidence of parental approval.
Dividends:
The dividend rate on Super Share Draft and Super Plus
Share Draft accounts will be based on prevailing marketplace conditions and
the earnings of the Credit Union during the dividend period. Dividends
earned are credited to the account monthly and included as the last transaction
on the statement.
Overdraft Privileges:
The Credit Union offers two options to
protect members from overdrafting their account, including share transfers and
lines of credit. Only one option can be requested by a member and
authorized by the Credit Union at any given time.
Option 1 - Share Transfer:
Upon prior written authorization
from the member, the Credit Union will automatically transfer shares from the
member's regular share account to the draft account to protect against an
overdraft. Federal law limits the number of electronic funds overdraft
transfers you can make from your share account to six per month. Share
transfers will be made at no charge to the member. However, members are
cautioned that this method can cause a loss of regular account dividends on the
amount transferred. In the event the account is overdrafted beyond
the available shares, the corresponding draft check will be returned unpaid and
will be subject to an
insufficient funds charge.
Option 2 - Line of Credit:
Members can request a line of
credit up to $10,000.00 that may be granted subject to the approval of the
Credit Committee.
In the event of an overdraft, funds in the exact amount
of the overage
will be automatically transferred from the member's line of credit to his/her
share draft account. In the event that an account is overdrafted beyond the
approved line of credit, it will be returned unpaid and will be subject to an
insufficient funds charge. The line of credit product is not offered or
intended for use as a long-term loan. It is provided only for overdraft
protection and is required to be repaid, with interest, in regular contracted
automatic payments through the share draft account. Additional payments
may be made at your Credit Union office or by mail without prepayment penalty.
Repayment Schedule:
Unlike most bank methods, the repayment
schedule will result in significant savings of interest charges for the
member. Again, at your Credit Union the minimum payment is constant
and is based on the balance of the loan. A simple interest rate will be applied
to line of credit loans. This will be a variable interest rate and therefore
will be subject to change after ninety (90) days' written notice is given to
members. Any change in rate, whether an increase or a decrease, will be
applicable to any outstanding balances that have not been fully paid prior to
the effective date of the new rate.
Share Draft Account Charges:
Charges will be imposed only for
printing draft checks and special services. The Credit Union will give members
thirty (30) days' written notice of any changes in charges or service fees.
Special Services:
In order to relieve the general membership of
the burden of cost for special services, only those members requesting these
services will be charged for them. These special services are as
follows: ATM Usage, Stop Payment Orders, Draft
Certification, Return of Draft for insufficient funds, Additional
copies of monthly statements, Copies of Paid Drafts - $1.00 per copy
($15.00 maximum charge per request for up to 100 microfilm copies of an
individual members account). These charges represent the Credit Union's
cost to obtain copies. However, wherever the member submits evidence of a
bona fide need, for example a tax audit or proof of payment demand, such charges
will be waived. Statement Reconciliation Assistance refers to a
member who wishes to obtain significant assistance in reconciling one or more statements.
Computer Printed Checks:
For those utilizing financial management
programs such as Microsoft Money or Quicken, your Credit Union check supplier
offers preprinted checks in draft, wallet size, or voucher check formats, in
either continuous form for dot matrix printers or single sheet for laser and ink
jet printers.
Termination of Accounts:
The Credit Union reserves the right to
terminate any account if it is deemed, at the Credit Union's sole discretion, to
be in the best
interest of the Credit Union and the general membership. However, the
following cases will be cause for automatically closing an account:
- Accounts
of members who have three instances (not three checks) of insufficient funds
within one year will be suspended for a period of ninety (90) days.
- Accounts of
members who have been reinstated after suspension will be canceled for a
period of one (1) year after two (2) more instances of insufficient funds within six
(6) months after reinstatement.
Have You Heard?
A New Law is Changing the Way Checks are
Cleared
The Check Clearing for the 21st
Century Act (Check 21)
In October 2003, the Check Clearing for the 21st
Century Act became law. It’s known as Check 21 for short and is intended to
dramatically improve the overall efficiency of the country’s check payment system.
Prior to Check 21, paper checks
had to be physically transported
between financial institutions before they could be cleared, whether it was across
town or across the country. This procedure is expensive, time consuming and
subject to weather, mechanical breakdowns, and even traffic jams.
Check 21 makes it legal for financial institutions to accept
a digital image of your original check. When and if it is converted back to
paper it is called a substitute check. A substitute check is the legal
equivalent of your original check and will include all the information contained
on your original. As of Oct. 28, 2004, every financial institution in the country
is required to accept these substitute checks.
What does this mean for you?
With Check 21 it will take less time for checks to clear
from the time it is written. Now, more than ever
before, you will need to ensure that you have sufficient funds in your account before
writing a check.
What does a substitute check look like?
A substitute check is a paper copy of the digital image of
your original check and is about the size of a business check. To protect you,
the law requires that the financial institution that created it must warrant
that it is accurate, and that it is produced utilizing industry standards.
If you have questions regarding Check 21, call any of our
credit union branches.
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