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What is Regulation E?
Regulation E, also known as the Electronic Funds Transfer (EFT) Act, is a federal regulation that affects your rights and liabilities as a banking consumer. In 2010, the U.S. federal government updated
Regulation E and made some major changes that affect our members with overdraft protection.
Beginning August 15, 2010, Regulation E says we must opt out all of our existing overdraft protection users from fee-based coverage on ATM and everyday debit transactions.
(Note that this doesn't include checks, electronic transfers, or recurring debit transactions.) If we receive notice from you otherwise
(either online, by mail, in person, or by phone), we can opt you in, which allows us to cover these transactions for you (if qualified).
All accounts opened on or after July 1, 2010, will require an "opt in" or "opt out" preference at the time of opening. This preference will govern how transactions are handled on your account
until we receive further notice from you.
Does Regulation E affect my account?
Yes, if you currently have overdraft protection enabled on your account. Our members who use Courtesy Pay will be particularly affected. You will need to "opt in" in order to continue this protection to its full extent. Otherwise, we must opt you out
of protection for some transactions as of August 15, 2010.
If you use basic overdraft protection (via automatic transfer from another Coast Central account), rest assured that these transfers will still take place as usual and cover your overdraft transactions
as long as sufficient funds are available. Regulation E only pertains to your protection if these funds run out.
Members with no overdraft protection, or no checking account, will not be affected by these recent changes to Regulation E.
Click here for a chart showing different overdraft protection scenarios, and how Regulation E affects them.
Should I opt in?
If you currently have Courtesy Pay overdraft protection on your account, and want to continue coverage of transactions as-is, you should opt in to maintain this protection. If you'd like to continue
coverage for only some types of transactions (recurring debit card transactions, electronic transfers, and checks), you may prefer not to opt in - this will cause your ATM and everyday debit
transactions to be declined (if attempted against insufficient funds) after August 15, 2010.
In general, if you have Courtesy Pay, you have the choice of having all transaction types protected, some of them, or none at all. Our system will automatically try to transfer funds from any designated overdraft protection accounts
to cover your transactions for a lower fee, but if all funds have been exhausted, you now have a choice regarding which of these transactions will be paid. If you opt in, Coast Central will continue to pay
your transactions. Although the fee is higher for this service, it prevents the inconvenience and embarrassment of having your card declined.
If you do not opt in, we can no longer cover ATM and everyday debit transactions for you after August 15, so these will be declined if you have insufficient funds. Your checks, electronic (ACH) transfers,
and recurring debit transactions, will still be protected. Coast Central will pay these transactions for you, and each will incur a separate fee.
If you'd prefer that none of these transactions be protected, you can also opt out of Courtesy Pay. This will turn off additional protection
(beyond any automatic overdraft transfers you have set up from other accounts) so that transactions against insufficient funds will be declined.
You can generally change your opt in/out preferences (regarding Regulation E, or Courtesy Pay in general) at any time by just notifying us of your choice. The only exception is that if you opt out of
Courtesy Pay completely, your account must qualify in order to have it reinstated. Regulation E opt in/out preferences (adding/subtracting protection for ATM and everyday debit transactions) can be changed quickly and easily.
If you do not have Courtesy Pay overdraft protection, we typically do not pay any transactions for you beyond the funds in your account. Your account must be qualified in order to receive this
protection.
How does this work for new accounts?
Accounts opened on or after July 1, 2010 will need to state an "opt in" or "opt out" preference at the time of opening. The important thing to note is that Courtesy Pay is not applied until 45 days
later, and that it is applied then only if your account is qualified. This will have significant bearing on how your overdraft transactions are handled.
When you open a new checking account, you'll usually sign a basic overdraft protection authorization form, which designates other Coast Central accounts that our system should check for available funds
before declining your transactions. This goes into effect immediately. However, Courtesy Pay is a discretionary service and new accounts are not evaluated until 45 days after
opening. At that time, if you are qualified, Courtesy Pay is applied and a letter is sent to the mailing address on your account, explaining the service. It is at this point that transactions can be
paid if no further overdraft transfers can be made (due to insufficient funds in checking and all designated transfer accounts). This is where Regulation E becomes especially important: if you've
"opted in," all transaction types will be protected (up to your Courtesy Pay limit). If you decided to "opt out" when you opened your account, only some transactions will be covered - your ATM and everyday debit transactions will
be declined.
As a new member, it's up to you to decide whether you'd like some or all of your transactions to be protected, but it's up to our staff to decide whether your account is qualified for Courtesy Pay. So although
you might "opt in" when you open your account, this does not necessarily guarantee that we will pay your overdraft transactions. Unless you receive a letter after 45 days (allow time for mailing if you're not an E-Statements
user) telling you we've added Courtesy Pay to your account, we will typically not pay transactions against insufficient funds. You will only be protected by automatic overdraft transfers
from other Coast Central accounts. If you're concerned and would like to inquire about Courtesy Pay, please contact us to see what you can do to qualify.
If you do opt in and qualify for Courtesy Pay, then find that you'd prefer not to continue this coverage, note that you can opt back out at any time.
What kinds of transactions does Regulation E affect?
Regulation E only concerns your ATM and everyday debit transactions - in other words, things you do at an ATM machine or with a merchant (on a non-recurring basis), be it in person, over the phone, or online. If we do not receive notice from you
stating that you'd like to "opt in" to continued overdraft protection coverage of these transactions, your card will be declined as of August 15, 2010 if insufficient funds are available. You can prevent this by opting in
(either online, by mail, in person, or by phone).
Regulation E does NOT affect your written checks, electronic (ACH) transfers, or recurring debit card payments. Regardless of whether we receive an opt-in request from you, we will still cover these
transactions if your account has been qualified for Courtesy Pay overdraft protection. Our system will automatically try any accounts you have set up for basic overdraft protection (via automatic transfer),
then pay additional checks, electronic transfers, and recurring debit card payments up to your Courtesy Pay limit. Please note that there is a fee each time we pay one of these transactions for you.
What's the difference between "everyday" and "recurring" debit transactions?
Everyday debit transactions include things like groceries, gas, and coffee. If you go to the mall and make a few purchases, these are considered "everyday" as well, as opposed to "recurring."
Recurring debit transactions are those where you have established a payment relationship with a biller, who periodically charges your debit card. If you have certain utility bills set up, for example,
to automatically debit your card, these will generally be considered recurring.
Note that electronic transfer payments, whether they are recurring or individually scheduled, are not affected by Regulation E. These transactions will be handled the same way
both before and after August 15, 2010, regardless of your "opt in" status with us. Written checks also fall into this category.
How are checks and electronic transfers affected by Regulation E?
These kinds of transactions, along with any debit transactions that have been designated as "recurring" (such as regular membership fees or dues that are charged to your debit card), are not affected
by the recent changes to Regulation E. Even if you do not opt in to continued protection, these transactions will still go through if you have Courtesy Pay, and will be paid (and incur fees) if we cover them
for you.
Is there a fee for opting in?
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 happens if I don't opt in?
Beginning August 15, 2010, any ATM or everyday debit transactions you attempt when there are insufficient available funds in your account will be declined. You will still be covered by overdraft
protection via automatic account transfer (if funds are available in these accounts), but beyond that, we will only be able to cover certain transactions. ATM and everyday debit transactions will
be declined; recurring debit transactions, electronic (ACH) transfers, and checks will still be paid up to your Courtesy Pay limit.
How do I opt in?
Opting in is easy. Just do one of the following:
- Fill out our quick and easy online opt-in form
- Call our Member Support Center at (707) 445-8801 or (800) 974-9727
- Email us at regEinfo@coastccu.org
- Send a written request to us (Attn: Member Support Center) at 2650 Harrison Avenue, Eureka, CA 95501
- Fill out an opt-in form in person at any of our member services branches
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