SIU Credit Union Blog

Tag: overdraft protection

What You Need to Know Before Deciding Whether or Not to Opt In

You’ve probably heard in the news recently about the new overdraft protection opt-in requirement for account holders at banks and credit unions.  UndoubtSTPPRF-00000405-001edly, you have been urged by some commentator on the national news network of your choice about the importance of not opting in.  Before you jump on this bandwagon, read this article.

First, here’s a brief summary of how overdraft protection works…  Let’s say John Smith has $100 in his account.  If a $150 item – whether it is a check, ACH debit (electronic payment), ATM withdrawal, or debit card purchase – tries to clear John’s account, there isn’t enough money, therefore the transaction is denied.  If John was enrolled in a program where he had overdraft protection, the $150 item would be paid, and John would be charged a fee for this service (the fee would most likely be much higher from a bank than a credit union…cheap shot, I know…just kidding, banker friends).

Ok, so now that you know the basics, let’s compare overdraft protection as it exists now with overdraft protection as it will exist during the second half of 2010.

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Pending Legislation on Overdraft Protection Needs Your Input

Dear Member:

You are one of our best members, and we thank you for the trust you have placed in our financial institution.

When you have used our overdraft program, it has enabled us to cover your unexpected expense or help you avoid embarrassment due to an error in your recordkeeping.  This meant you were able to pay for something at the grocery store, fill up your gas tank or unexpectedly purchase a prescription for a sick family member.  These are the reasons you used this safety net – and the reasons it should remain available to you and your family.

As you know, there is a cost for not having overdraft services.

  • The returned check charge from the grocery store (averaging $38.50 in our city)
  • The damage to your credit from bouncing a check.
  • The embarrassment of having your purchase declined with your neighbors watching from the back of the line.
  • The inconvenience of having to return to the merchant to ‘pick up your bad check’ and pay a ransom for it in CASH!

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