What is Courtesy Pay?
Courtesy Pay is a discretionary overdraft convenience service offered to qualified members which helps to minimize declined transactions and bounced checks. If approved, it is applied in addition to ordinary overdraft protection (via automatic account transfer), and is only applied if available funds in all applicable accounts have been completely depleted.
Without this service, a check written against insufficient funds would bounce – sometimes multiple times if the merchant continues to resubmit it, incurring a fee each time. With Courtesy Pay, the check clears (if within the applicable limit), preventing inconvenience for both you (the member) and your payee(s). One fee is charged and the overdraft situation can be more quickly and easily resolved.
If you are qualified for Courtesy Pay, you will receive a letter informing you of how the program works, including all terms and conditions. New member accounts will be evaluated after 45 days. You may opt out of Courtesy Pay at any time by calling us at (707) 445-8801.
What is a Courtesy Pay fee?
A Courtesy Pay fee is charged each time Coast Central pays a transaction for you to cover an overdraft. Instead of bouncing the check and returning it for insufficient funds, we cover it to protect your relationship with your payee(s). You then only need to repay the credit union for the overdraft and fee(s), saving you the inconvenience and time ordinarily involved in renegotiating payment with each payee.
What is an overdraft fee?
Different from a Courtesy Pay fee, an “overdraft fee” is charged when we must make a transfer from one of your accounts to another, to cover what would otherwise be an overdraft. When funds are present in another account, this can be preferable to the higher Courtesy Pay charge to cover your transaction(s).
Sometimes, when only some of the funds needed to cover an overdraft are present in other accounts, our computer system will transfer whatever it can before Courtesy Pay (if applicable) kicks in. You may experience an overdraft fee in addition to a Courtesy Pay fee in this case.
Overdraft transfers can only be made for accounts authorized by the member for this purpose. Please contact us if you are unsure which accounts you have set up for overdraft protection, or complete an Overdraft Protection Authorization Form to update your coverage.
How can I prevent overdrafts?
The best way to prevent overdrafts is to keep regular track of your transactions. You may choose to document every purchase as it is made, or periodically check your receipts against your Online or Mobile Banking account history, e-statements, or paper statements. The better you document your account activity, the better you know what your balance is and how much you can spend.
Important: You should not rely solely upon the balance stated on your receipt or online banking in order to determine how much you can spend. These balances (even your stated “available” balance) may not include all applicable holds to your account. You may have outstanding checks or debit purchases which have not yet cleared, and debit card purchases are not always held for the exact amount of your transactions. Coast Central cannot control the amounts held or charged by merchants, nor the order or timing of cleared checks, so it is always best to keep track of your actual transactions as they occur.
Which overdraft protection method is right for me?
You’ll want to choose an overdraft protection method that best suits the way you use your accounts, and the way you would like your transactions to be handled. You may use the following information for guidance:
If you keep close, careful track of your balances, and you prioritize the clearing of your transactions, Courtesy Pay can help you avoid the inconvenience and embarrassment of a declined card or bounced checks. Since Courtesy Pay allows your check(s) to clear up to your approved limit, you save yourself the trouble of having to renegotiate payment with your payees. Please note that you must be qualified to receive Courtesy Pay services.
If you are primarily a debit card user however, especially if you don’t keep close track of your transactions, you may find that Courtesy Pay is more of a burden than a convenience for you. Since a fee is charged for each transaction we cover beyond a zero balance, these can sometimes add up quickly. If you’d prefer to have most transactions declined when there are insufficient funds in your account, you may choose to opt out of Courtesy Pay.
General overdraft protection (via automatic account transfer) incurs a significantly lower fee to transfer funds from other credit union accounts. This service also attempts to cover multiple transactions at once by transferring funds in $100 intervals, which helps to save you money. If funds are present in another designated account, this transfer will be made; otherwise, transactions are usually declined. We’ll ask you to complete an Overdraft Protection Authorization Form to request this service.
No Overdraft Protection
Or, you may elect to set up no overdraft protection at all. If you never keep funds in any other account besides checking, or if you prefer to keep your savings funds separate and not connected to your checking account, this option may benefit you. Most debit card transactions will decline if there are insufficient funds in checking.
Important: Since Coast Central cannot control the way that merchants choose to hold funds or charge you for your purchases, every transaction may not decline if there are insufficient funds in your account. Many gas stations, for example, initially hold only $1.00 instead of the full transaction amount. Thus the transaction may be approved if you only have $5.00 in your account, but when the full amount clears, you will become overdrawn if the transaction amount is more than $5.00. Please keep careful track of your transactions to be sure you don’t spend more than you have available.
How can I sign up for Courtesy Pay?
New memberships (with checking accounts) are automatically evaluated after 45 days. If qualified, you will receive a letter welcoming you to the Courtesy Pay service and explaining our terms and conditions. If you do not receive this letter, you may need to establish more positive account history with us before you’ll be qualified.
If you’ve been a member for some time, you may already have this service (your qualification letter may have been sent quite some time ago). If you’re curious to see whether you have Courtesy Pay already, please contact our Member Support Center.
Can I opt out of Courtesy Pay?
You may opt out of Courtesy Pay overdraft protection at any time. Simply call or write us with your request.
Opting back in later is a possibility; however, you may have to re-qualify.
What is my Courtesy Pay limit?
Personal accounts with Courtesy Pay have a limit of up to $800; business accounts have a limit of up to $1,500.
Why did I receive Courtesy Pay fees?
Courtesy Pay occurs to minimize declined transactions and bounced checks. We recommend reviewing your statement or online banking history, and examining each transaction in chronological order (this is not always the same order that they appear on your account history). When transactions are posted to your account on a different day, the original date is shown on that transaction line in your account history. You may also need to check receipts in order to determine the exact order that transactions were placed.
Start with a previous day’s balance, before fees started occurring and when you know everything was in order with your account. As you subtract transactions in the order they occurred (again, do not necessarily use the order on your account history), you should begin to see what happened. The most common reason for unexpected overdrafts is the assumption that sufficient funds were present in the account. If you forgot about an outstanding check or hadn’t taken a pending debit card transaction into account, you (or a joint member) might have spent funds that weren’t actually there.
If you go through this process and still can’t determine how the overdraft(s) occurred, please contact our Member Support Center or drop by one of our Member Services Branches. We’re happy to help you review your transactions.
How do overdraft transfers work?
If you attempt a transaction which totals more than the available balance in your checking, our system will attempt to make transfers from accounts you designate (provided you have requested this service). You may select up to four accounts that our system will try before a transaction is declined.
Overdraft transfers are made in increments of $100 when possible, always rounding up to the nearest $100 in order to cover additional transactions. Since an overdraft fee is charged for each transfer, our system tries to anticipate and cover future transactions as well, to prevent you from receiving multiple overdraft fees whenever possible. Note that excess funds that may result in a transfer will not be transferred back to your originating account.
I have overdraft protection…why wasn’t a transfer made?
Occasionally, an ATM or Point of Sale (POS) purchase will decline even when a member has overdraft protection. This occurs when funds are not present in the first or second designated savings accounts, because our system may time out before the third account on these types of transactions. If this occurs, please contact our Member Support Center for assistance.
If you have overdraft protection set up to draw funds from a line of credit or Visa card, transfers will fail if you are late on your loan payment (even by one day). Amending this situation should resolve the problem.
Overdraft protection can only transfer funds from available balances. If you have a check hold on one of your designated accounts or a pending ATM deposit, these funds cannot be used for overdraft protection until the hold is released. Likewise, the $50.00 held in your Membership Savings is unavailable for overdraft transfers.
What can I do if I used Courtesy Pay and can’t pay the money back right now?
We recognize that Courtesy Pay fees can sometimes rack up faster than anticipated, and sometimes you need time to pay things back. For this reason we offer a Fresh Start Repayment Plan, which allows you to convert your entire Courtesy Pay-related overdraft into a small loan-like account (interest free), then pay it off over a period of up to four months. This clears out your checking account, bringing it back to a zero balance so you can “start fresh.”
To set up a Fresh Start Repayment Plan, visit any of our Member Services Branches, or call our Member Support Center for more details. If you have already taken advantage of this program, and have since been re-qualified for Courtesy Pay, you may be able to set up another Fresh Start. This decision will be made at our discretion.
What is Regulation E and how does it affect Overdraft Protection?
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. Beginning in 2010, Regulation E required us to “opt out” all of our existing overdraft protection users from fee-based coverage on ATM and everyday debit transactions, unless they specifically told us they preferred to “opt in.” (Note that this doesn’t include checks, electronic transfers, or recurring debit transactions.) All new accounts 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.
How do I know if I’m “opted in” for overdraft protection?
Once your account has been opened and established for 45 days, if you qualify for this service, you will receive a letter with Courtesy Pay details. Courtesy Pay allows your transactions to clear the first time, eliminating the need to re-coordinate payments with your payees and incurring multiple fees. Please read and compare your options on our Courtesy Pay & Overdraft Protection Services. Feel free to contact us at (707) 445-8801 or stop by a Member Services Branch if you have further questions.
How do I know if I’m “opted out” for overdraft protection?
Once your account has been opened and established for 45 days, if you qualify for this service, you will receive a letter with Courtesy Pay details. However, you may choose at any time to not participate in Courtesy Pay by contacting us at (707) 445-8801 or stopping by a Member Services Branch. For more information, please read and compare your options on our Courtesy Pay & Overdraft Protection Services.
What happens if I’m not “opted in” for Overdraft Protection?
Unless you opted in at the time of opening your account, or before the Reg E conversion process took place in 2010, not all of your transaction types will be equally covered by your overdraft protection. Since Reg E required us to essentially “turn off” protection for ATM and everyday debit transactions unless you requested otherwise, these transactions will be handled differently than others when overdraft protection is needed.
Regular overdraft transfers will still be made (when you have funds available in designated accounts), but Courtesy Pay coverage – if you have it – will vary depending on your “opt in/out” status.
Please note that “everyday” debit transactions are different from “recurring” debit transactions. Everyday transactions are for things like gas purchases, groceries, or coffee, while recurring transactions are those set up for periodic payments with billers, such as utility companies. If you’re opted in, all of your transactions will be treated equally, but if not, ATM and everyday debit transactions you attempt when there are insufficient available funds in your account will be declined. Recurring debit transactions, electronic (ACH) transfers, and checks will still be paid up to your Courtesy Pay limit.
For more information on your options, please review our Courtesy Pay & Overdraft Protection Services.