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Account Terms and Conditions change June, 2013

Our account Terms and Conditions have changed. Members who receive paper statements will receive a paper update with their statement. Those with eStatements will get an email notice. These will take effect 30 days after receipt. This revised version does not change our practices; it basically includes language to help limit the liability and risk that are subject to us and our members.

Terms and Conditions Update (PDF)

Overview of changes

Agreement section:

  • In the first paragraph we have added a clause advising members to retain the Terms and Conditions for future reference.
  • In the second paragraph we made minor punctuation changes and provided that the deposit account agreement is also subject to other rules such as the operating letters of the federal reserve Credit Unions and payment processing system rules.
  • In the last paragraph, we have added two sentences - However, this Agreement does not intend, and the terms "you" and "your" should not be interpreted, to expand an individual’s responsibility for an organization’s liability. If this account is owned by a corporation, partnership or other organization, individual liability is determined by the laws generally applicable to that type of organization. This is intended to address the application of certain provisions in the agreement to individuals signing on business accounts. For instance, the account agreement defines "you" as the accountholder and anyone with authority to deposit or withdraw. But in the Liability section it says each of you are jointly and severably liable for any account shortage. This was never intended to mean that an individual was necessarily responsible for a corporate debt.

Liability section:

  • In the first paragraph we’ve indicated that charges can be deducted without notice to the member
  • In the second paragraph we’ve made several non-substantive changes to improve readability and understandability. We have also added - This also includes any action that you or a third party takes regarding the account that causes us, in good faith, to seek the advice of an attorney, whether or not we become involved in the dispute. All costs and attorneys’ fees can be deducted from your account when they are incurred, without notice to you. We have done this to make the text more clear and understandable, and to expand the institution’s right to fees and costs to include situations where the institution is not directly involved in a dispute, but feels it needs counsel to protect itself.

Deposits section:
We replaced our former standard section with a more expansive version that is more clear and understandable, and better conforms to plain language principles. We have also specified that the institution acts only as the member’s agent before settlement is final, that the institution can take an item for collection rather than deposit, and that the institution can require a third-party indorser to guarantee the indorsement or sign in the presence of the institution.

Withdrawals section:
We replaced our standard section with a more expansive version that is more clear and understandable, and better conforms to plain language principles. Specifically, it is formatted into subsections, which makes it easier to read. We also moved information regarding funds availability to this section from the check processing section.

Business, Organization and Association Accounts section:
We have added a specific representation that the person signing on behalf of the entity has authority to open the account and do business on the account on behalf of the entity.

Stop Payments section:
We replaced our former standard section with a more expansive version that is more clear and understandable, and better conforms to plain language principles. It explains that this section applies to checks, but not to other types of transfers such as consumer electronic fund transfers. It explains the expiration period for oral and written stop payments (for most states). It explains that the member will not receive notice of the expiration and it provides that the member is liable for any costs including attorneys’ fees that the institution might suffer as a result of the stop payment.

Amendments and Termination section:
We replaced our former standard section with a more expansive version that is more clear and understandable, and better conforms to plain language principles. Additionally, this section advises the member that items may be dishonored after account closing, that the member is responsible to leave enough money in the account to cover outstanding items, that if the institution provides the member a notice of changes to the terms of the account, the member agrees to those changes if the member continues to have the account, and that in some cases, such as suspected fraud, reasonable notice to the member might be notice after the institution takes action on the account.

Direct Deposits section:
We made changes to clarify the meaning of the first sentence.

Check Processing section:
We deleted the last two sentences, which address the time when funds will be available because that information is more appropriately addressed in the Withdrawals section. We also made several grammatical changes for clarity and plain language purposes. And we more clearly state that the institution will only rely on information that is in the MICR line on the check.

Facsimile Signatures section:
We replaced our former standard section with a more expansive version that is more clear and understandable, and better conforms to plain language principles. We also provide that the institution has no duty to honor facsimile signatures unless the member makes advance arrangements with the institution, and that the member must notify the institution if it believes the facsimile signature has been misused.

Authorized Signer (or Agency, in some states) section:
We replaced our former standard section with a more expansive version that is more clear and understandable, and better conforms to plain language principles. It also specifies that the owner does not give up any rights in the account, authorized signer cannot effect the rights of the owner, that the owner may terminate the authorization at any time, that the authorization terminates at the death of the owner, and that the institution may refuse to accept the designation of an authorized signer.

Restrictive Legends section:
We replaced our former standard section with a more expansive version that is more clear and understandable, and better conforms to plain language principles. This section also explains that the institution cannot identify restrictive legends because of automated check processing.

We've added sections as part of our standard Terms and Conditions. Those sections are:

  • Indorsements - explains the member’s responsibility for indorsements and makes the member liable for losses resulting from placing indorsements improperly
  • Death or Incompetence – requires the member to notify the Credit Union of the death or incompetence of anyone with a right to withdraw and that the institution can continue to pay items for 10 days after death or incompetence Fiduciary Accounts – describes fiduciary accounts and provides that the institution has no obligation to monitor or enforce the terms of a trust
  • Credit Verification – gives the institution authority to verify credit and employment history
  • Legal Actions Affecting Your Account - describes the institution’s options in addressing various actions such as attachment and garnishment, and mitigates liability of the institution
  • Security - explains actions the member can take to reduce the risk of theft or fraud and provides that the member is liable for the loss if the member is negligent in safeguarding checks (unless the institution is negligent). We've revised this section to provide that if the institution offers fraud prevention services such as positive pay or commercially reasonable security procedures which the member rejects, the member is responsible for any loss that could have been prevented by the fraud prevention service.
  • Telephonic Instructions – generally provides that the institution does not need to act upon telephonic or fax instructions unless it has agreed to
  • Claim of Loss – limits the liability of the institution if there is a loss in the account and provides that if there is a loss in the account the member must cooperate with law enforcement and the institution and take action to mitigate the loss
  • Early Withdrawal Penalties – specifies that the institution can impose an early withdrawal penalty even if the withdrawal was not initiated by the member
  • Address or Name Changes – requires the member to provide notice in writing to the institution of any changes in name or address
  • Resolving Account Disputes – provides that the institution may place a hold on funds in the account if there is an adverse claim to the account and that the institution is not liable for items dishonored because of the hold
  • Waiver of Notices – provides that the member waives notice of dishonor, non-payment or protest