WHAT YOU NEED TO KNOW
NEW Overdraft Rules for Debit & ATM Cards
New Federal Reserve rules give debit and ATM card users additional options regarding overdrafts. Cortland Banks along with other banks, credit unions, and other financial institutions will offer you the ability to make decisions about overdraft services for transactions made with your debit or ATM cards.
Click the link to view the form detailing our overdraft services.
THE BASIC FACTS
Types of overdraft services. An overdraft occurs when you make a purchase or ATM transaction but don't have enough money in your account to pay for it. For a fee, we will cover you when you become overdrawn. This fee will apply to each time you overdraw your account.
Generally, there are two types of overdraft services:
1. Standard overdraft services. Cortland Banks will cover your transaction for a flat fee of about $32 each time you overdraw your account. For example, if you make a purchase with your debit card for $150 but only have $100 in your account, your account will be overdrawn by $50 and the bank will charge you a fee. If you then make an ATM withdrawal for $50, your account will be overdrawn by $100 and you will be charged another fee. In this example, the fee the bank charges for overdraft services is $32, you will pay a total of $64 in fees. Translating into your account being overdrawn for a total of $164.
2. Overdraft protection plans. Cortland Banks offers a line of credit to cover transactions when you overdraw your account. We charge an annual fee of $60, and a transaction fee of $10, but overdraft protection plans can be less expensive than standard overdraft services, depending on usage.
THE NEW RULES
- You choose. In the past, banks automatically enrolled you in their standard overdraft services for all types of transactions when you opened an account. Under the new rules, your bank must first get your permission to apply these services to everyday debit card and ATM transactions before you can be charged overdraft fees. To grant this permission, you will need to respond to the notice and opt in (agree).
- Existing accounts. If you do not opt in (agree), beginning August 15, 2010, our overdraft services won't apply to your everyday debit card and ATM transactions. These transactions typically will be declined when you don't have enough money in your account, but you will not be charged overdraft fees.
- New accounts. If you open a new account before July 1, 2010, we will treat you as an existing account holder: you will receive a notice about our overdraft services and will have to decide if you want them for everyday debit card and ATM transactions. If you open a new account on or after July 1, 2010, we will give you the opportunity to opt in at account opening.Unless you opt in, everyday debit card and ATM transactions typically will be declined when you don't have enough money in your account.
- Flexibility. Whatever your decision, the new overdraft rules give you flexibility. If you opt in, you can cancel at any time. If you do not opt in, you can do so later.
- Checks and automatic bill payments. The new rules do not cover checks or automatic bill payments that you may have set up for paying bills such as your mortgage, rent, or utilities.
Click the button below if you would like to print
the Opt In form. Print Form
Information gathered from the Federal Reserve March 16, 2010.