Overdrafts, Overdraft Fees, and Overdraft Protection

Unexpected situations confront us almost daily. And it can be reassuring to know somebody's got your back when you need some support. Imagine you're out of town and your car breaks down. Getting it fixed will cost $400, but you only have $290 in your checking account–and your credit card is at home. It's in situations like this you would probably want that debit card transaction to clear, so you wouldn't be stranded, but rather be on your way.

In August 2010, new federal legislation took effect requiring consumers to opt-in to their financial institution's overdraft service to cover ATM and everyday debit card transactions that overdraw their account. At Lake Trust Credit Union, we've found that many of our members, even if they don't use it, like knowing that they're covered in these types of unexpected situations.

However, without your opt-in, or consent, you may be out-of-town needing repairs on your car and have your debit card declined when in the past your transactions were protected and they were approved, even when you didn't have the funds in your account. To save yourself the embarrassment and inconvenience of having your card declined, you'll need to opt-in to this overdraft service.

You have the right to cancel your opt-in preference at any time. If we don't receive an opt-in request, we assume that you DO NOT want Lake Trust Credit Union to protect your ATM and everyday debit card transactions.

What you need to know about overdrafts and overdraft fees

An overdraft occurs when you do not have enough money in your checking account to cover a transaction, but Lake Trust Credit Union pays it anyway. We can cover your overdrafts in two different ways:

• We have standard overdraft practices that come with your account.
• We also offer overdraft protection plans, such as pulling from a savings account, money market or line of credit which may be less expensive than our standard overdraft practices. To learn more, ask us about these plans.

Transactions covered automatically with Courtesy Pay standard overdraft protection

• Checks and other transactions made using your checking account number
• Automatic payments, electronic withdrawals, or ACH

Transactions not covered with Courtesy Pay standard overdraft protection unless you ask us to

• ATM transactions
• Everyday one-time debit card transactions

We pay overdrafts at our discretion, which means we do not guarantee that we will always authorize and pay any type of transaction. Even if you opt-in for this additional protection, whether or not we will authorize to pay an overdraft is based upon your relationship with the credit union. If we do not authorize and pay an overdraft, your transaction will be declined.

What are the standard overdraft fees?
Under our standard overdraft practices:

• There is a $29 fee each time an overdraft is paid.
• If your account is overdrawn for 10 or more consecutive business days, there is an additional $5 per day fee.
• There is no limit on the total fees charged for overdrawing your account.

There is no fee for opting in to this continued protection. You'll only incur fees if we actually cover an overdraft for you.

What's the difference between 'everyday' and 'recurring' debit card transactions?
Everyday debit card transactions include things like groceries, gas, coffee or a purchase at the mall. Recurring debit card transactions are those where you've established a payment relationship with a biller, who periodically charges your debit card. An example of a recurring transaction might be if you have certain utility bills set up to automatically debit your card.

Note that electronic transfer payments, whether recurring or individually scheduled, are not affected by this regulation change. Written checks also fall into this category.

What happens if I don't opt-in?
Any ATM or everyday debit card transaction you attempt when there are insufficient funds available in your checking account will be declined. You will still be covered by overdraft protection via automatic account transfer (if you have established this service and if funds are available in these accounts); however, beyond that, we'll only be able to cover certain transactions. ATM and everyday debit card transactions will be declined (if funds are not available in your account); electronic (ACH) transfers and checks will still be paid up to your Courtesy Pay limit.

How do I sign up for standard overdraft protection on my ATM and everyday debit card transactions?
If you want us to authorize and pay overdrafts on ATM and everyday debit card transactions, you are required to opt-In by:

• completing a simple on-line form, or  
• calling 888.267.7200 to speak with a representative.