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Share Draft Checking (SDC) Account Policy

The WNC Community Credit Union Share Draft Checking (SDC) Account is a non-interest bearing demand deposit account that provides members with a convenient source of handling their personal financial affairs.

Individual and/or joint SDC accounts will be offered to qualified credit union members. At least one of the parties opening an SDC account must be 18 years of age. Commercial/Business SDC accounts may be available at some future date.

Original canceled share drafts will not be returned to the member, however, copies may be ordered through the credit union. For auditing purposes, the copy attached to a share draft statement showing that check number cleared is sufficient proof of a payment.

Share draft checks will be provided by Liberty Check Printers located in Roseville, MN.

Criteria for Opening and Maintaining an SDC Account

An individual must be a credit union member in good standing and the application for an SDC account must be approved by a credit union employee.

If the credit union chooses to utilize a "check reporting service" such as Telecheck or Checkfax, adverse prior history may be a cause for not qualifying for an SDC account.

Periodic deposits may be accepted by payroll deduction, direct deposit, by mail or in person.

WNC Community Credit Union reserves the right to reject any SDC account applicant not in good standing, or that has a negative report from Telecheck, Checkfax, or any similar check reporting service. Further, if a member wishes to have loan overdraft protection from a line of credit, a Loanliner application must be submitted and approved by a loan officer.

Opening a Share Draft Checking (SDC) Account

Members must have a Share/Savings account to have additional services.

A "Share Draft Checking Account" application must be completed by each member wishing to open an SDC account. This form and an initial deposit of at least $25.00 are necessary to open an SDC account.

The initial deposit may be made by a deposit of cash or check, or from a direct transfer from a share account.

Dividends

This account is a non-interest bearing account.

Overdraft Protection

The credit union will offer two methods of covering share drafts presented for payment when there are non-sufficient funds in the SDC account. Those two options are listed below:

  1. Transfers from the member's regular share account in an amount equal to the draft(s) presented or $50.00 increments. There will be a service charge for this method. Click Here for Fee Schedule
  2. Loan advances from approved overdraft protection in increments of $50.00 sufficient to cover the draft (s) presented up to a maximum of $300.00.

If option number 1 is used, there is a maximum of three automatic transfers allowed per calendar month per Regulation D. After three automatic transfers have been made, the share draft (s) will be paid via your overdraft loan or returned NSF. There is a Back Office service charge for this service. Click Here for Fee Schedule

If the overdraft loan option is used, a transfer will be made to cover the draft (s). Transfers will be made in $50.00 increments until the draft amount is covered or the loan is advanced to the limit. Once a loan is drawn to the limit and the draft(s) cannot be fully covered, the credit union will attempt to transfer from the regular share account to cover the draft (s). A maximum of three overdrafts from savings per month will be processed. There will be a service charge for each transfer. Click Here for Fee Schedule After that, drafts will be returned Non-Sufficient Funds (NSF) due to number of transfers allowed from savings accounts per Regulation D.

Members are notified of overdraft transfers and the action being taken by the credit union to cover the draft (s) by an overdraft notice.

Any share draft presented for payment which cannot be paid using one or all of the methods listed above will be returned as unpaid. WNC Community Credit Union reserves the right to close any SDC account and refuses to honor any share drafts presented on that account.

Loan overdraft protection will be an open-end unsecured loan approved under the credit union's Loanliner program at a rate which will be specified by the Board of Directors. The loan will be approved or rejected according to the credit union's unsecured loan policy. Minimum payments will be calculated in order to pay off the loan. Members will pay $40.00 per month.

Accounts Closed By The Credit Union

SDC accounts may be closed by the credit union if any of the following occur:

  1. The credit union is required to return more than three share drafts on any account within any three month period because of non-sufficient funds in the member's SDC account.
  2. Evidence of kiting between the member's SDC account and other accounts within or outside the credit union.
  3. The member becomes 30 days or more delinquent on any credit union loan.
  4. Fraud or forgery involving any credit union account.
  5. Violation of any credit union policy or procedure.
  6. If the member causes the credit union a loss.
  7. If the member files bankruptcy or becomes insolvent.

Members will be notified in writing when their SDC accounts are being closed by the credit union and the reason for such closure. The credit union accepts no further responsibility for the non-payment of drafts once notification of the closure of the account has been given. On the effective date of an account being closed, the credit union will prevent cash withdrawals. This hold will be in effect for a maximum of seven days in order to give share drafts already written an opportunity to clear. At the end of the seven day period of time, all share drafts on the account will be returned unpaid.
**IT SHOULD BE NOTED THAT ABUSE OF A SHARE DRAFT CHECKING ACCOUNT MAY BE CAUSE FOR DENIAL OF CREDIT AT THE CREDIT UNION!**

Accounts Closed By A Member

If a member chooses to close an SDC account voluntarily, provisions must be made to cover any outstanding share drafts. The member should also return all unused share drafts to the credit union.

Share Draft Processing Procedures

Share draft processing will occur daily excluding legal holidays and weekends. NSF's uncollected items and closed accounts processing will occur daily by 11:00am. NSF and overdraft notices will be mailed on a daily basis.

Statements

Statements will be mailed on a monthly basis to the member's address as listed on the account.

Funds Availability

Our policy is to make funds from a member's deposits available to them on the same business day it is deposited. In some cases, the credit union will not make any or all of the funds that are deposited by check available on the same day. Listed below are the reasons why the credit union may delay a member's availability to withdraw funds from a check deposit.

  1. If the credit union believes the check deposited will not be paid.
  2. If the checks deposited in one day total greater than $5,000.
  3. If a check is deposited that has been returned unpaid.
  4. If the member's SDC account has been repeatedly overdrawn during the prior six months.
  5. If there is an emergency, such as failure of communications or computer equipment.

We will notify the member, if the deposit will be delayed for any of these reasons and we will tell them when the funds will be made available. In no case will funds be unavailable any longer than 10 business days (non-business days are weekends and Federal holidays) after the deposit is made.

Audit Procedures

An External Auditor chosen by the Board of Directors which performs a Supervisory Committee Audit should routinely review the SDC accounts of all employees of the credit union, members of the Board of Directors and all formally appointed committees to assure that no preferential treatment is given. The following areas should be monitored:

  1. Frequent overdraft situations.
  2. Negative balances.
  3. Signs of check kiting.
  4. Non-assessment of applicable fees.
  5. Excess transfers in violation of the SDC account policy.

Cost of Share Drafts

The first fifty Share Drafts will be made available at no charge. Future Share Draft expenses shall be paid by the member and will be assessed against the balance of their SDC account according to the price determined by the Board of Directors.

Stop Payment Orders

A member may order a stop payment on a single share draft or on a range of items in the event that an entire sequence of share drafts is lost, stolen or misplaced. Stop payments will become effective 24 hours after the member presents a stop payment order, in writing, to the credit union. Unless we have a positive affirmation of the member's identity, we will require written orders before processing stop pays.


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