In addition to free overdraft protection from your Savings or a Personal Line of Credit, PFFCU offers a Courtesy Overdraft (COD) program where we will pay overdrafts on your Checking Account, up to a predetermined limit, for a fee if there are insufficient available funds in your Savings Account and you either don’t have available credit on your PLOC or you have not selected the PLOC option to cover overdrafts. When a transaction item is paid through the COD Program, it causes your checking account to have a negative balance, which must then be repaid.
If we pay for an overdraft under the COD Program, the amount of the fee we will charge depends upon the type of transaction:
- We charge a fee of $19.00 for overdrafts caused by checks, including Bill Payer checks and ACH debits to your Checking Account.
- We charge a fee of $6.00 for overdrafts caused by every day debit card transactions.
These fees are set forth in our Fee Schedule, which we update periodically.
Your Checking Account Balance
Your checking account has two kinds of balances: the “actual” balance and the “available” balance. It is important to understand how these balances differ so that you know when a given transaction may cause you to incur a fee under the COD Program.
The actual balance is the amount of money that is actually in your account. It reflects all transactions that have “posted” to the account (i.e., completed transactions for which payment has been deducted from your account). It is important to note that your actual balance may not reflect the money that is available for you to spend at any given time, as it does not reflect transactions that have occurred, such as purchases or deposits, but have not yet posted.
The available balance, on the other hand, is the amount of the actual balance that is available for you to use at any given time. This balance often differs from the actual balance, as it reflects not only the completed and posted transactions, but also any transactions for which payment is authorized but still pending. It also reflects restrictions on the funds in your account such as deposit holds and authorization holds for pending debit card transactions.
A common transaction that can cause your available balance to differ from your actual balance is an everyday signature based (non-PIN) debit card transaction. When you present your debit card to a merchant to purchase an item, the merchant electronically contacts us to authorize the transaction. When that happens, we place an “authorization hold” on the available funds in your account. This reduces the available balance of your account, usually in the amount of the transaction (the hold can be for less than the full transaction amount when the amount is not known at the time of authorization; e.g., when you are purchasing gas or add a tip at a restaurant). Your actual balance remains unchanged, however, because the transaction has not yet posted and the funds are still in the account. When the merchant processes the transaction and submits it to us for payment, the transaction is posted to your account and the payment amount is deducted from your actual balance to reflect the completion of the transaction. This can happen hours or up to several days after you made the purchase and we authorized the transaction.
How We Apply COD Fees to Your Account
We apply COD Program fees based upon the available balance in your account. Here is an example of how this works. Suppose you have an actual balance and available balance of $500, and you make a signature based debit card purchase for $300. We would put an authorization hold on your account for $300, which would reduce your available balance to $200. Your actual balance would still be $500 because the transaction has not yet posted. Before the merchant sends the transaction to us for completion, you have a $350 check clear your account. Although the actual balance of the account appears sufficient to cover the check, there would not be sufficient “available” funds to cover the check (the available balance is $200 due to the authorized but still pending debit card transaction), so we would honor the check via the COD Program and assess the $19 fee.
It is therefore important that you keep track of your transactions (checks, automatic bill payments, etc.) and the “available” funds in your account at any given time. You can be assessed a COD fee on an insufficient available balance even if your actual balance appears to indicate that there are sufficient funds to cover a transaction. In doing so, you should keep in mind the following:
- Funds that you deposit into your account may not be immediately available. The availability of deposits is governed by our “Funds Availability Policy Disclosure,” which is set forth in our General Agreements and Disclosures.
- Because checks and ACH transactions are processed through the Federal Reserve system, there can be a delay of several days from when you present a check or authorize an ACH payment and when the check or ACH is presented to us for payment from your account.
- Checks or ACH payments that were previously returned or rejected ( and charged a NSF fee) due to an insufficient available balance can be re-presented or re-submitted by a merchant or other third party resulting in an additional fee(s), which could be an additional NSF fee if returned or rejected again or a COD fee if paid.
- In a PIN-based debit card transaction, the funds are typically deducted from your account immediately (e.g., at the time of the sale).
- In a signature-based debit card transaction, as discussed above, the merchant usually seeks authorization for the transaction at the time of sale, at which time we place an authorization hold against the available funds in your account, which reduces your available balance (but not your actual balance) by the amount of the hold.
Your acceptance into the COD Program does not obligate PFFCU to pay an overdraft on your account. Even if you are in the COD Program, the decision to pay an overdraft is made on a case by case basis at the sole discretion of PFFCU. We will decide to pay overdrafts on a case-by-case basis, in our sole and absolute discretion. We have no obligation to notify you before we pay or return any check, item, or other transaction, and may refuse to pay any overdrafts without first notifying you even if your account is in good standing and we have paid previous overdrafts. PFFCU is not liable if we do not pay an overdraft.