[neethaj]

I need help and can't find a single thing about disclosure and banks and credit union. Our credit union offered all of its customers a $500 safety net to cover NSF checks-this started last Oct. Since then, starting in Nov. we began receiving notices for insufficient funds, which the credit union covered, but they charged us $25.00 for each item! There were so many and no one would help us so I wrote to the President of the Credit Union and finally got an appt with the Dir. Of Operations. She credited our account for about $600 (out of over $1200 in fees which we still don't feel we are responsible for) - then this May when we got our IRS refund, I put $900 in savings - within two weeks that was entirely gone and we got notices of transfer from our savings acct to our checking account. My question is: I know they do this but don't they have to set forth the exact amount transferred each time? And, our statement from the credit union never shows the time, yet the time is always on an ATM receipt - and the statement online (they had set up an online system and I finally started using it - nothing matches! And this online account doesn't reflect a $5.00 fee for every single transfer done - the $5.00 fee is NOT on the statement sent directly from the Credit Union - and we now get up to 3 notices a day for NSF - they arbitrarily will "allow" a payment to be covered by them - and it also is obvious that they wait until the end of the day, and the largest amount is what they "bounce" so that all the others will bounce - it just doesn't stop and now I have to go get another appt! I am going to close the account but I need some help before I go back - can they just take any amount out of either account and not explain the amount taken, why it was taken, and also, their policy book states nothing about this! HELP! Thank you, neethaj

[ScottGem]

You don't say where you are, so I would check with the banking authority (State or Federal) that oversees the credit union.

An overdraft "safety net" is essentially a loan. If a check is presented and there are insufficient funds to cover it, then you are loaned enough to cover the shortfall. The CU can then charge you a fee or interest for the use of this money.

Frankly, though I'm a bit nonplussed by this. Don't you balance your checkbook? Don't you know how much you have before writing a check? Or are you saying, that the charges were not of your doing. If the latter, then you need to put a stop on activity on this account IMMEDIATELY. This shouldn't be allowed to drag on.

You also need to get a copy of the CU's policies. They have to be in writing somewhere.

[Cassie]

When they told you about the $500.00 safety net, was there a letter explaining how it worked, with charges. Did you sign something at some point in time allowing them to take money from savings to checking to cover NSF checks. You need to go in immediately and have someone sit down with you and exlplain how it all works. What they are allowed to do, what charges they have and for what. IF they notify you when they take money out of savings or out of overdraft and put into your checking. Have them write it down for you if they do not have it all in writing, which they should.
I do not know much about credit unions, but I did work in banking. You really need to get a handle on this now or your NSF charges will be more than your paycheck. Ask them to help you balance you checkbook, leave it alone and use cash and money orders for a while, make sure all checks are in before you start using it again.
It can be confusing to some customers using their overdraft protection. I am sure the credit union has all of their bases covered legally or they would be out of business. They must not have been good at explaining policies to you, and sent you information with a lot of "small print" which often gets thrown in the thrash. With the information you are giving, it does sound rather unorganized. Does the online statement show checking, overdraft and savings?
It seems as though no one has time anymore to help customers, but hopefully you will find a very helpful person there that can be valuable. I helped many get their accounts straightened out gave them some advice as to how to stay on track.
Good luck, if you have any questions, I will try to help answer.

[Fr_Chuck]

Ok, as scott mentioned, this "safety net" is just a loan, it does not mean you have not over drafted your account, they merely allow a loan to pay the check you wrote.

( I will note this will not happen if you don't spend money you don't have)
Or go to a loan company borrow 500 dollars and put it in your checking account as your own buffer) just don't spend it, just for those accidental bounce checks.

But if you will merely balance your check book each time you write a check and don't write a check unless you have the money, this will not happen. And ifyou have to ( bu should not) merely add the 25 dollar fee.

I will assume since you did not say, but if the bank advances you money as a loan on the 500 dolars, if you depoist money into checking or savings, they may transfer that money to pay off this advace loan.

I don't understand your misunderstanding about it, you borrow money, you have fees to borrow this money to cover checks you write. You have to pay this money back.

I believe you problem is you are believing this is "your 500 dollars" to spend and use if you want to, and do so without paying any fees for that service. What you described is just the normal way these advance loans to cover bad checks are done.

[neethaj]

Thanks so much for your reply! After winning 1/2 of my first dispute, I was able to get the Dir. Of Operations to verify that this is NOT A LOAN! I have always known it was not a loan; I have also not written checks without the money in the account. The problem is simply that whenever I do put money in the account, all of a sudden?? Check begin to bounce. This legal issue I question is the fiduciary relationship between me and the credit union. Don't they have a duty to disclose to me their policies? And also, how much a transfer amount was for? And why it was done every day in May? I already got an extra $500 and deposited it - it was gone; there is nothing we can do although I will not give up - does anyone know about the fidiciary responsilbility to consumers who have an account at a federal credit union?
Thanks so much - greatly appreciate all the help I can get!

[ScottGem]

First, here's the website for the agency that oversees Federal Credit Unions:

http://www.ncua.gov/

Second, You are using the word fiduciary incorrectly. But the CU does have a responsibility for having all their procedures and policies detailed in writing.

Third, I still think you are misunderstanding something. The Overdraft coverage is not a loan until you use it. But once you use it, then it becomes a loan. From the sound of it, its not a traditional interest bearing loan, but rather a fee based one. But, no matter what they call it, they are advancing you funds to cover the shortfall and charging you something for the use of those funds. That's a loan!

However, what I am reading here, though its not 100% clear, is that the money is disappearing without your doing anything. Its not a matter of you not keeping track of the balance, but a matter of funds being deducted from your account. If that's the case, they HAVE to make good. Unless they can prove you were responsible for the transactions, then it's their error. You have to keep after them to get details of all transactions and then mark the ones you dispute. Then they need to put back the ones you dispute.

[Cassie]

The 500.00 is not a loan but if it was not your 500.00 to begin with and you use it, it then becomes a loan, I assume the bank is not gifting you with the 500.00. You will have to pay that money back, or at least make monthly payments. Some NSF chks are returned automatically each day for up to 3 days, that is a $25.00 chg per day per chk, that can add up really fast. Some banks just put the amount in to cover the nsf chk and others put it in in increments of say $25.00, $50.00 etc. As for sending out info about transferring the funds, check with the credit union.
As I said before, go into the bank have them help you balance your checkbook. I was amazed at how many people would call the bank, get a balance and think that was the correct balance. There may be 10 chks out. Someone might hold a check for a month or so. Learn to balance your checkbook at the end of the month when the statement comes. It never ceased to amaze me that so many people did not have a clue how to do that. They thought the balance was what the statement showed, without subtracting the checks that were still out.

[Dennis48]

Lucky your not in Canada. First of all whether it is a Credit Union or Bank they are legally obligated to give you copies of all their account agreements and copies of which you sign. Most if not all give you brochures to read. The technicalities are in the FINE print. Surely, if you signed up for an overdraft facility of $500.00 then you are charged interest for the amount you use. However, if you happen to go over the limit, the Institution are in their every right to bounce your cheque for NON SUFFICIENT FUNDS, sometimes they charge a service fee say of $5.00 for the handling of the entry and on top of that they charge an NSF charge. Hear in Canada some Chartered Banks charge up to $40.00 Canadian for an NSF cheque. Being a former Senior Banker myself, it would get to the point that if there was a consistancy in bouncing cheques and would call the customer in and go over their finances. Sometimes it just takes a little personal interest in the customer to determine their over all financial position. I have had many times wherein I have turned a bad situation around to retaining a good customer and had all their family open up accounts. [ On the other hand if the customer refused help and insisted on writing NSF cheques I would ask them to CLOSE their account.

Now in Canada, a personal Credit Bureau Report is done before the account is open. If the Credit Report shows up bad, then we can refuse to open up the account.

[JuLee]

Hi, I work in a credit union and we get calls about this all the time. I believe the 'safety net' is just another word to call when your CU is willing to pay for all your checks and check card purchases if you go over the zero balance, up to $500. Our CU calls it "courtesy pay". You really just need to balance your check book and check card purchases; even if you go over a penny, the CU will charge you the NSF fee. Ours is $28, you're lucky your's is only $25. And, another thing, if your CU is like ours, checks clear at night after the closing hours and deposits are first thing in the morning so make sure you have the money in your account before you write out your checks.

[aqua@home]

... If the Credit Report shows up bad, then we can refuse to open up the account.

This is absolutely wrong Dennis. Every bank in Canada, must provide at least a basic bank account to any citizen requiring one. (If this were true, they would be able to deny children a bank account, they have no credit.) In addition, most employers require pay-cheques to go directly into a bank, which would be impossible if people were denied an account.

[Darquechylde]

The "Safety Net" your CU mentioned is not a loan in the banks eyes. Due to certain federal regulations, the bank cannot call it such. Should it be a loan, the bank would have no say so in what checks were paid as long as there were funds available in this "loan". This "Safety Net" is not really Overdraft Protection, unless you filled out an application requesting credit. From what I read, that was not the case.

The bank I worked at had the same type of program, however we were able to set limits on the use of the funds, but we were required to inform customers of the rules of using these funds. Had we not done so, we would have failed quite a few audits.

From my experience, all banks and credit unions have a schedule of fees that is to be given to all customers/members when an account is opened or fees are changed. Some financial institutions include this information with their polices that for the most part no one truly reads. I would be willing to bet that they included the amount of the transfer fee within that documentation. If not, I would think that they would be fined or criticized during a routine audit.

If the funds are being removed without your knowledge, then you MUST meet with a CSR or MSR (Customer or Member Service Representative) to go over your account and look for any fraudulent activities and complete the needed affidavits to recover those funds.