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Frequently Asked Questions

It is important to stay informed about the recent changes to regulations concerning courtesy overdraft protection for ATM and everyday Debit Card transactions.  Listed below are some Frequently Asked Questions about the changes.  If you have further questions, please do not hesitate to contact your Hometown Banker.     

What has changed regarding courtesy overdraft protection on ATM and everyday Debit Card transactions?

Why should I consider opting-in?
 
How may I opt-in?
 
Can’t I just opt-in while at the ATM machine, or in the store?
 
If I opt-in, does the bank guarantee that my ATM/Debit overdrafts will be paid?
 
Does this regulation affect courtesy overdraft protection for checks and automatic payments?
 
What fees apply to TowneBank’s courtesy overdraft protection?
 
How can I avoid overdraft fees?
 
Are there other overdraft protection plans available?
 
If I have one of the above overdraft protection options listed above, do I still need to
opt-in?
 
What happens if I do not opt-in?
 
Is anyone exempt from this new regulation?
 
Can I change my Overdraft Coverage selection?
 
On joint accounts, do both members need to opt-in?
 
What if I would like to opt-out? 
 
  
What has changed regarding courtesy overdraft protection on ATM and everyday Debit Card transactions?
 
In the past, banks could provide courtesy overdraft protection as a convenience for members. This meant that banks could approve and authorize transactions, at their discretion, even if there was not enough money in the account to cover the item. Because the bank paid the overdraft as an accommodation, a standard overdraft fee typically applied.
 
Under changes made to Regulation E, the Federal Reserve now requires that banks obtain their member’s permission (their opt-in) before paying any overdraft ATM and one-time Debit Card transactions and assessing the associated fee.
 
Why should I consider opting-in?
 
Opting in can provide a safety net on those rare occasions when your balance is lower than expected. Maybe someone in your household wrote a check and forgot to record it in the checkbook. Or maybe an expected deposit was delayed. Whatever the reason, your opt-in can possibly save you from embarrassment at the grocery store, or help you out in an emergency situation – like when you’re low on gas, and only have your Debit Card with you. 
 
How may I opt-in?
 
For EXISTING TowneBank members, any courtesy overdraft services for ATM and one-time Debit Card transactions will only be available if you have agreed to this protection.
 
You may notify the bank by:
 

•  Calling or visiting any TowneBank office

** Please note that you must opt-in for EACH account that is tied to an ATM/Debit Card. 
 
For NEW TowneBank members, you will have an opportunity to opt-in when you open your new account.
  
Can’t I just opt-in while at the ATM machine, or in the store?
 
No. If you would like TowneBank to consider authorizing and paying overdrafts on your ATM and everyday Debit Card transactions, it’s important to opt-in as soon as possible. Because there is no fee to have the courtesy overdraft protection, and no fee if you never use it, you simply receive no-cost, peace of mind BEFORE you ever need it. (Unfortunately, at the point-of-sale, there’s no way to automatically communicate your preference to the bank.)
  
If I opt-in, does the bank guarantee that my ATM/Debit overdrafts will be paid?
 
No. TowneBank authorizes and pays items that overdraw your account on a discretionary basis, based on your account history and relationship.
  
Does this regulation affect courtesy overdraft protection for checks and automatic payments?
 
No. Members must only opt-in to have the bank consider paying overdrafts on one-time Debit Card transactions (like gas, groceries, and other everyday items) and ATM withdrawals. We will continue to consider authorizing and paying overdraft items from checks, bill payments, and recurring automatic payments (such as gym memberships or utilities that draft automatically from your Debit Card) based on your account standing and banking relationship.
 
What fees apply to TowneBank’s courtesy overdraft protection?
  • A lower fee of $25 applies to each paid overdraft item created by a one-time Debit Card or ATM transaction.
  • A $40 fee applies to each paid overdraft item created by a check, automatic bill payment, or other transaction made using your checking account number.
  • Items paid which result in an overdrawn balance of $5 or less will not be assessed an overdraft fee.
  • Overdraft fees will be capped at 5 items per day.
  • There is no fee to opt-in to courtesy overdraft protection, and no fee if you never use it.
  • If your account is overdrawn for two or more consecutive business days, there is an additional charge of $7 per day. Please bring your account to a positive balance as soon as possible.
How can I avoid overdraft fees? 
 
TowneBank offers a variety of financial tools to help you effectively manage your accounts. If you are currently an online banking user, check out the notifications and low balance alerts, found by selecting 'My Settings' and then 'Alerts and Notifications' in Towne-Personal/Biz, and under the Accounts, Activities & Reporting tab in Towne-Biz Plus. If you have not yet tried online banking, visit www.townebank.com for demos and enrollment. These online services are free and offer 24/7 account balances, online transfers, bill payments, and more. Your favorite hometown banker would be happy to provide additional solutions for managing your account.
  
Are there other overdraft protection plans available?

Yes. TowneBank members may link their accounts for overdraft protection. We also have several types of Coverline’s, i.e. overdraft lines of credit, which provide overdraft protection up to the approved credit limit. Normal credit approval criteria applies. Certain fees and interest charges apply. Ask your hometown banker for details.
  
If I have one of the above overdraft protection options listed above, do I still need to opt-in?
 
Yes. Even with overdraft protection plans in place, it is still possible that you might not have enough funds or available credit to cover an everyday Debit Card transaction or ATM withdrawal. In that event, the transaction could be denied.  If you have opted-in, you may still be able to complete your transaction.
 
What happens if I do not opt-in?
 
If you are an existing member and have not opted-in, any ATM and one-time Debit Card transactions that may overdraw your account will be declined. Your hometown banker will not be able to pay those transactions on your behalf, even if you would like them to.
 
Is anyone exempt from this new regulation?

Business members are not impacted by this new regulation. Businesses will continue to have courtesy overdraft protection for ATM, one-time Debit Card, check, and automatic transactions. Businesses do not need to opt-in. Businesses will also receive the lower fee of $25 per item, effective July 1, 2010, on any overdrafts created by ATM and one-time Debit Card transactions.
 
Can I change my Overdraft Coverage selection?
 
Yes. If you opt-in now, and change your mind later, you can cancel at any time by contacting TowneBank by telephone, letter, or in-person.
 
On joint accounts, do both members need to opt-in?
 
No. One signer per account can opt-in.
 
What if I would like to opt-out?
 
A ‘no response’ serves as an opt-out. For existing members, if we are yet to hear from you, any ATM and one-time Debit Card transactions that may overdraw your account will be declined. These transactions will continue to be declined until you notify the bank that you would like to opt-in.

 




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