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Overdraft Protection

Tools for When Money Gets Tight

Overdraft fees can be confusing, which leads to frustration for members when an overdraft occurs. CSE has tools to help members when money gets tight, such as:

Standard Overdraft Practices - i.e., Courtesy Pay that comes with your account

Automatic Overdraft Protection through a link to your savings account, which may be less expensive than our standard overdraft practices/Courtesy Pay.

What is an overdraft?

An overdraft occurs when a debit/withdrawal transaction attempts to come out of your account when there are not enough funds to cover the transaction. When this happens, there are three possible outcomes:

  • CSE rejects the transaction. If this happens, the payment is returned and your account is charged a $25 NSF (Non-sufficient funds) return fee.
  • If a member has Courtesy Pay Overdraft Protection set up, CSE may honor the insufficient transaction. If this happens, your transaction will be paid, and your account will be charged the standard $25 Courtesy Pay fee.
  • If a member has Automatic Overdraft Protection setup, a transaction that would normally pull your account into the negative would first look at a back-up account that the member has setup. If there are sufficient funds in the back-up account, CSE will automatically transfer sufficient funds to cover the transaction. If there are not sufficient funds, one of the previous two scenarios will play out.

How are overdrafts calculated?

For the purpose of determining whether an overdraft has occurred, we use your available balance. As transactions are processed throughout the day, we add them to, and subtract them from, the actual balance as they occur. Credit transactions are added to the actual balance when the credit transaction settles. Debit transactions are subtracted from the actual balance when the debit transaction settles. Memo-posted EFT debits (i.e., debit transactions that have been authorized but have not yet settled) are subtracted from the actual balance when the transaction is authorized. This determines the available balance at any given point in time for overdraft purposes. Each debit transaction that we process when your account has a negative available balance at the time the debit transaction is processed is an overdraft, subject to an overdraft charge.

Example: Assume your actual and available balances are both $150, and you swipe your debit card at a restaurant for $30. The transaction is memo-posted to your account, reducing your available balance to $120. Your actual balance is still $150. Before the restaurant charge is sent to us for processing, a check that you wrote for $130 is presented for settlement. Because you have only $120 available (there is a hold on your account for the pending restaurant charge of $30), your available balance would be -$10 if we pay the check, even though your actual balance is $150. In this case, since the charge is based on the available balance, you will be charged an overdraft fee. (If we return the check you will be charged an NSF fee.) That fee will be deducted from your account, further reducing the balance.

Automatic Overdraft Protection

Automatic Overdraft Protection is a service in which members have the ability to establish up to two back-up accounts in which CSE will automatically transfer funds to cover transactions that would have resulted in a negative balance. In order for an automatic transfer to successfully occur, there must be sufficient funds in the backup account prior to the transaction occurring. A successful transfer will only occur from one of the two backup accounts.

Example: If you have a transaction pulling your account into the negative by $200, and have one backup account with $100 and a secondary backup account with $100, the transfer will not take place. The $200 must be in one backup account to pull the entire amount of the transaction in question.

Courtesy Pay Overdraft Protection

Courtesy Pay* overdraft protection is one more way we can help you meet unexpected financial needs.

At CSE, we understand everyone needs an occasional safety net, which is why we offer Courtesy Pay overdraft protection. Courtesy Pay is a non-contractual service, whereby we may honor your insufficient transactions up to your limit of $400, as long as you maintain your checking account in good standing (view our Courtesy Pay Terms and Conditions). Courtesy Pay does not guarantee that CSE will pay your insufficient item. However, if you have an overdraft, your account will be charged our standard $25 non-sufficient funds (NSF) fee.

If approved, COURTESY PAY overdraft coverage will be automatically available for checks, automatic bill payments and other debit transactions. If you would like overdraft coverage for your ATM withdrawals and everyday debit card purchases, simply ask us.

For more details regarding your options for overdraft coverage, please refer to "What You Need to Know About Overdrafts and Overdraft Fees".

Explanation of Overdrafts

Overdraft TypeExplanationFee?
Non-Sufficient Funds (NSF)Non-Sufficient Fund items are items that will be returned or declined payment, as there are not enough funds in an account to cover the transaction. Non-Sufficient Fund items may try to clear your account more than once, resulting in multiple returned items, depending on the merchant.Yes, $25
Automatic Overdraft ProtectionAutomatic Overdraft Protection is available for members to set up one or two accounts as a safety net when transactions try to clear your primary account and the funds are not available. Automatic Transfer will automatically transfer funds from your backup account to cover the transaction, if there are enough funds in the account to transfer.No
Courtesy Pay Overdraft ProtectionCourtesy Pay Overdraft Protection is a discretionary overdraft service. Rather than automatically returning or declining a non-sufficient fund item that you may have, we will consider authorizing and paying your reasonable overdrafts and apply our standard $25 per item to your account.Yes, $25

How to Avoid Overdraft Fees

There are a number proactive measures members can take to avoid overdraft fees:

  • Setup Automatic Overdraft Protection
  • Setup Account Alerts to be notified of transactions and/or low balances
  • Keep a registry of all of your account transactions

*Courtesy Pay Terms & Conditions

It is the policy of our Credit Union to comply with applicable laws and regulations, and to conduct business in accordance with applicable safety and soundness standards.

Courtesy Pay Service is a discretionary courtesy or service and not a right of yours nor an obligation on our part to consider paying your reasonable overdrafts. It is available if your eligible account has been open for at least ninety (90) days and thereafter you maintain your account in good standing, which includes at least: (A) Continuing to make deposits consistent with your past practices; (B) You are not in default on any loan obligation to CSE Federal Credit Union; (C) You bring your account to a positive balance (not overdrawn) for at least one business day every thirty (30) days; and (D) Your account is not the subject of any legal or administrative order or levy. Of course, any and all credit union fees and charges, including without limitation our non-sufficient funds/overdraft fees (as set forth in our fee schedules) will be included in this limit.

We are not obligated to pay any item presented for payment if your account does not contain sufficient collected funds. It is our standard practice, within our Courtesy Pay Policy, to authorize and pay overdrafts for checks, automatic bill payments and other debit transactions made using your account number, unless you opt out for overdraft coverage on these types of transactions. We do not authorize and pay overdrafts for ATM withdrawals or everyday debit card purchases, unless you consent (opt-in) to overdraft coverage for these types of transactions. (Refer to opt-in form for details)

A non-sufficient funds balance may result from: A) The payment of checks, electronic funds transfers, or other withdrawal requests; B) Payments authorized by you; C) The return, unpaid, of items deposited by you; D) The imposition of credit union service charges; or E) The deposit of items which according to the credit union’s Funds Availability Policy, are treated as not yet “available” or finally paid.

We may refuse to pay an overdraft for you at any time, even though your account is in good standing and even though we may have previously paid overdrafts for you. You will be notified by mail of any non-sufficient funds items paid or returned that you may have; however, we have no obligation to notify you before we pay or return any item. The amount of any overdrafts plus our standard $25.00 Overdraft Charge(s) (which is a per item fee) shall be due and payable upon demand. If there is an overdraft paid by us on an account with more than one (1) owner on the signature card, each owner, and agent if applicable, drawing/presenting the item creating the overdraft, shall be jointly and severally liable for such overdrafts plus our standard Overdraft Charge(s). As a general rule, when multiple items are received simultaneously for payment, the items will be cleared in the order in which we receive them which can affect the total amount of overdraft fees incurred. We reserve the right to change the clearing order at any time without notice.

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