Money Management

Understanding Overdraft Privilege

Overdraft Privilege helps protect you against having items returned in the event of an inadvertent overdraft of your checking account by giving you a reserve for emergencies or unexpected situations.

  • There is no fee for having this privilege on your account; you are only charged if you overdraw your account. 
  • You do not have Overdraft Privilege on your account until you receive written confirmation from us that it has been added to your account.
  • To keep Overdraft Privilege, your account must remain in good standing, which means:
    • Continuing to make regular deposits to your account within each thirty-day period.
    • Bringing your account balance to a positive balance within each thirty-day period.
    • You are not in default on any loan or other obligation to Coosa Pines FCU.
    • You are not subject to any legal or administrative order or levy against your account with us.

How Overdraft Privilege Works for You

Overdraft Privilege is not a line of credit. However, if you overdraw your account, we have the discretion to pay the overdraft, subject to the limit of your Overdraft Privilege.

For example, suppose you do not have Overdraft Privilege and your account balance is $50:

  • If you have a debit item for $100, Coosa Pines FCU will charge your account a fee (currently $28) for having an item with insufficient funds, and will then return the item if adequate funds aren't available.  
  • In most cases, the establishment where you made the transaction will require you to pay for the item and will normally charge you a fee (usually around $30) for writing an NSF item. 
  • This means that you have now incurred two fees ($28 Fee at Coosa Pines and $30 at the merchant) for an item that wasn't even paid!

However, if you had $500 of Overdraft Privilege, here is how the situation typically would have worked:

  • When the item arrived at Coosa Pines FCU, we would pay the item and charge you the $28 fee for an overdraft transaction. 
  • The total charge to you would have been $28 compared to $28 PLUS $30 in merchant fees if you had not had Overdraft Privilege. 
  • Additionally, you avoid being added to any bad check lists on the check approval networks or with the merchant.

Making It Balance

When you use your Overdraft Privilege, you must remember to subtract the overdraft fee from your account balance. In the example above you would have subtracted $128 from your account: $100 (the amount of the check) plus $28 (the amount of the overdraft fee).

Remember that any additional items that come in while your account has a negative balance will also be charged the NSF fee of $28 per item. It is important to record these fees. The next deposit that you make will bring your balance to the amount of the deposit minus the amount you were overdrawn (including any overdraft fees).

Understanding Uncollected Funds

If you make a deposit and are informed that a HOLD will be placed on some of the funds deposited, those funds are NOT available for you to withdraw until the date indicated on your notice or receipt. If an item is presented for payment while the funds in your account are on hold and you have Overdraft Privilege on your account, you will be charged a negative funds fee of $28 to pay the item even though you have a positive ledger balance in your account.

For example: 

  • You have $100 in your checking account and deposit a $700 check on which we place a $500 hold ($200 is available to you immediately) for 3 days. Although you have a ledger balance of $800, only $300 is “available” for checks or other debits to be paid.
  • If you have a $500 Overdraft Privilege in the example above, you have available to you $800 to pay debit items. However, you will be charged a $28 fee for any debits paid against your account in excess of the $300 shown above as “available”.

Points to Remember About Overdraft Privilege

  • Every debited item on an overdrawn account will be charged an OD fee of $28.
  • You must promptly repay the amount of the overdraft and any overdraft fees.
  • Your Overdraft Privilege will not be included as part of your available balance at an ATM.
  • You must bring your account to a positive balance within 30 days, or the Overdraft Privilege will be removed from your account.
  • You do not have Overdraft Privilege until you receive a letter telling you that it has been put on your account.
  • You must opt-in to payment of overdrafts for ATM and everyday debit card transactions.

If you have questions, please feel free to call or stop by your local Coosa Pines branch. We'd be happy to help!

Avoid Overdraft Fees

An Overdraft Occurs When You Try To Spend More Money Than You Have Available in Your Checking Account

For example, let's assume you have $40 in your account. You ask the phone company to electronically deduct $35 from your account to pay your bill. You now have $5 available. Next, you use your debit card to make a $10 purchase.  You could overdraw your account if the credit union allows the $10 transaction to be processed. This could cost you expensive overdraft fees.

The amount you are overdrawn plus any overdraft fees will be deducted immediately, in full, from your next deposit(s)--including from payroll deposits made by your employer, government benefit deposits, and other direct deposits on which you may depend. These deductions will lower your account balance once again and may increase the risk of more overdrafts and costly fees.

The Opt-In Rule

ATM and Point-of-Sale Debit Card Purchases

In 2010, federal regulations took effect that provide certain protections for consumers when their deposit accounts are overdrawn. Bank customers and credit union members have a choice whether to opt-in to a bank or credit union's overdraft program. Consumers must authorize their financial institution to pay ATM and everyday debit card transactions that exceed their account balance. This is called the "opt-in rule". 

If you do not opt-in, Coosa Pines FCU will decline your ATM withdrawals and point-of-sale (POS) debit transactions if you do not have enough money in your account to cover the withdrawal or purchase.

What Fees Will I Be Charged if the Credit Union Pays My Overdraft?

Under our standard overdraft practices, we will charge you a fee of $28 each time we pay an overdraft under Overdraft Privilege. There is no limit per day on the total fees we can charge you for overdrawing your account.

If you want Coosa Pines to authorize and pay overdrafts on ATM and everyday debit card transactions, you may opt-in by submitting a form online. Alternately, you may:

  • Call us at (256) 378-5559,
  • Send a secure email through Virtual Branch online banking,
  • Or complete the printed form and present it at any branch or mail it to: 33710 US Hwy 280, Childersburg, AL 35044.

You may revoke your authorization for Coosa Pines FCU to pay these overdrafts at any time by any of the above methods. Your revocation must include both your name and your account number, so that we can properly identify your account.