Opt-in Overdraft Rules to Impact Everyone

Debit and ATM cards are a modern convenience.It’s hard to imagine living without them. Once primarily limited in use to the occasional cash-withdrawal, consumers now use debit cards numerous times each day, from their morning latte to an afternoon gas tank fill-up to an evening online shopping spree.

This convenience makes it easier than ever to make purchases and payments, but it also makes it easier to cause overdrafts and incur fees associated with overdraft protection programs. Those fees have been on the minds of both consumers and regulators in recent years and, as a result, the Federal Reserve Board has announced new rules governing overdraft protection programs that go into effect on July 1, 2010.

Details of the New Rules
These new rules require MidWest America FCU to obtain prior “opt-in” authorization from members in order to charge fees associated with ATM and debit card overdraft protection programs. It’s important to note that the opt-In rules apply only to ATM and so-called “one-time” debit card transactions, such as retail purchases.

The opt-in rules do not apply to loan advances or share transfers associated with checking accounts or recurring debit transactions (eg. monthly health club and other regularly scheduled bill payments.) This is because the Federal Reserve recognized that most consumers want overdraft services to cover important bills, such as rent, utilities, and other necessary purchases.

Why Opt-in?
A natural question credit union members have is, “Why should I opt-in?” The new legislation will limit this important service program that members have relied on for years. Simply put, overdraft programs are designed for consumer protection and convenience. The vast majority of consumers do not incur overdraft fees; however, overdrafts do occur. This can cause consumers embarrassment or financial hardship. Under the new rules, if a member does not opt-in, the credit union will now be prohibited by law from automatically providing that member overdraft protection!

How to Opt-in
As a safeguard against card rejections, you should opt-in to our overdraft protection services to continue receiving the services and convenience you currently enjoy. You can opt-in to overdraft protection services by doing any of the following:

• Fill out the opt-in form and deliver it to your nearest branch location or mail it to MidWest America FCU at 1104 Medical Park Drive; Fort Wayne, IN; 46825
• Contact your local branch or call MidWest America at 800-348-4738
• Email us at esd@mwafcu.org with your opt-in request. For security purposes, please include only the last 4 digits of your social security number and the last 3 digits of your account number in your email along with your full name and address.
  

Ways to Avoid Overdraft Fees
Managing your money and keeping track of your balances is the best way to avoid overdraft fees. Be fully informed about overdraft issues by remembering these key tips:

Be Aware of Holds. Businesses may place a “hold” on an account that may be much larger than the amount actually spent, such as when you rent a car or check into a hotel. Additionally, some holds are placed for just $1.00 and then post for the actual transaction amount, this is the case with most gas station purchases.

Use Online Tools. Today more than ever, it’s easier to keep track of account balances. MidWest America’s Internet Banking site provides you access to this information. The website is www.mwafcu.org.