Account Disclosures for Personal and Business Accounts

Transcription

1 Account Disclosures for Personal and Business Accounts onewestbank.com 2011 OneWest Bank, FSB. All rights reserved. FDIC insured /11

2 This is an addendum to the Account Disclosures for Personal and Business Accounts ( Disclosures ) that replaces the WELCOME TO ONEWEST BANK and YOUR AGREEMENT WITH US sections found on pages 6 and 7 of the Disclosures effective August 3, 2015 as follows: WELCOME TO ONEWEST BANK, A DIVISION OF CIT BANK, N.A. ( ONEWEST BANK ) Banking with OneWest Bank At OneWest Bank, we deliver friendly, personalized banking services, One Person at a Time. OneWest Bank was founded as a regional bank dedicated to customer service and a commitment to our community. We pride ourselves as a bank with a strong capital foundation, conservative management and a consistent focus on providing value to our customers. Thank you for banking with OneWest Bank. We look forward to serving you. Merger with CIT Bank Effective August 3, 2015, CIT Bank, a Utah chartered bank, merged with and into OneWest Bank N.A., which was renamed CIT Bank, N.A. CIT Bank, N.A. conducts its deposit banking operations under two names: OneWest Bank, a division of CIT Bank, N.A. Relationship Center Offices in Southern California CIT Bank, N.A. Retail Deposit Products through BankOnCIT.com, as well as commercial deposits. FDIC Insurance Funds in your deposit accounts are generally insured up to $250,000 per depositor at CIT Bank, N.A. by the Federal Deposit Insurance Corporation (FDIC). The FDIC provides separate coverage for deposits held in different account ownerships such as: (1) individual or single ownership accounts; (2) joint ownership accounts; (3) revocable trust accounts (including pay-on-death accounts); (4) corporations, partnerships and unincorporated association accounts; and (5) certain retirement accounts (including IRAs). To calculate your deposit insurance coverage, use the FDIC s Electronic Deposit Insurance Estimator (EDIE) at For questions about FDIC coverage limits and requirements visit or call toll-free at ASK-FDIC. How the Merger of OneWest Bank N.A. with CIT Bank affects FDIC Insurance New Customers: Any deposit accounts you open on or after August 3, 2015 through either OneWest Bank, a division of CIT Bank, N.A. or BankOnCIT.com are counted together for purposes of FDIC insurance coverage limits because these amounts are on deposit with the same FDIC-insured institution, CIT Bank, N.A. If you owned a deposit account(s) with either CIT Bank or OneWest Bank N.A. as of August 3, 2015: If you owned one or more deposit accounts with either CIT Bank or OneWest Bank N.A. as of August 3, 2015, those accounts and any additional deposits you make or new accounts you open are counted together for purposes of FDIC insurance coverage. This is true regardless of which of our banking operations (OneWest Bank, a division of CIT Bank, N.A. or BankOnCIT.com) you use to open new accounts or make additional deposits. If you owned deposit accounts with both CIT Bank and OneWest Bank N.A. as of August 3, 2015: If, as of August 3, 2015, you had deposit accounts with both CIT Bank and OneWest Bank N.A., the FDIC has established a grace period from August 3, 2015 through January 30, 2016, during which your August 3, 2015 CIT Bank deposit balance will be insured separately from your OneWest Bank N.A. deposit balance. Both are insured, but separately. This is to allow you time reorganize the deposits you held prior to the merger, if needed. Please note: a longer grace period may apply for CIT Bank Certificate of Deposit (CD) accounts: A CIT Bank CD account that matures on or before January 30, 2016, and which is renewed in the same dollar amount (either with or without accrued interest) and for the same term as the maturing CD will continue to be separately insured until the first maturity date after January 30, A CIT Bank CD account that matures after January 30, 2016, will continue to be separately insured until its maturity date. During the grace period, any new accounts opened or additional deposits made in either of our banking operations will be counted together with the August 3, 2015 balance in your OneWest Bank N.A. account(s) for purposes of FDIC insurance coverage limits. On January 30, 2016, the grace period will end (except for certain CIT Bank CD accounts as described above) and all your deposits will be counted together for purposes of FDIC insurance coverage limits because they will all be on deposit with the same FDIC-insured institution, CIT Bank, N.A CIT Group Inc. All rights reserved. FDIC Insured /15. II

3 Additional Services to Consider After you open your account, please consider these optional services that can help you manage your account. Debit Card. Use your debit card to pay for purchases at merchants that accept debit cards, to make deposits at OneWest Bank ATMs and to withdraw cash from ATMs. Direct Deposit. Have your paycheck, retirement benefits or other payments deposited electronically into your checking or savings account. Online Banking. Helps you manage your finances. Here are some of the things you can do using our Online Banking: (1) check your account balances and review transaction history; (2) transfer funds between your accounts; (3) receive your statements and paid checks online, then review or print them at your convenience; (4) reorder checks and change your address; and (5) place stop payments on checks you ve written. Online Bill Pay Service. Pay your bills electronically. Automatic Transfer Service. Helps make saving easier by automatically transferring funds from your checking account to your savings account. Overdraft Protection Service. Protects you from overdrafts and from us having to return checks you have written by automatically transferring available funds from your savings account or overdraft line of credit to your checking account. Ways to Access Your OneWest Bank Account You can access your acvon our website at or by calling us at Your account cannot be accessed through the BankOnCIT.com website. YOUR AGREEMENT WITH US Our Agreement This Account Disclosures booklet and any applicable product or service addenda are together referred to as the Agreement. The Agreement explains OneWest Bank s deposit accounts for both businesses and consumers, and other related services we make available to you, as well as the terms and fees that govern these accounts and services. By signing and returning the signature card for your account (also known as our Master Agreement ), you confirm that you have received this Agreement, and that you have reviewed, understood and agreed to the terms and conditions, fees and other information contained therein. We may add to, delete or change the terms of the Agreement at any time subject to applicable law. Except as indicated herein, we will inform you of changes that affect your rights and obligations. Throughout the Agreement, the words you, your and yours refer to the account owner or owners. Each person who signs the signature card is an owner of the account opened under that Agreement. We, us, the Bank and our refer to CIT Bank, N.A. including its OneWest Bank division. The Agreement contains important information about your accounts. You are responsible for ensuring that all authorized signers on your account are familiar with our Agreement. We recommend you retain a copy of this Agreement (and any other notices the Bank provides you regarding changes to the Agreement) for as long as you maintain an account with us. Amendments and Changes in Account Terms We may change (add to, delete or alter) the terms of this Agreement with you at any time by mailing, ing or delivering a notice, a statement message or an amended Agreement to any of you at the last address (location or ) on file for you, your account or the service in question. Unless otherwise required by law, we may amend the Agreement without prior notice (e.g., by posting the information in our offices, on our website or otherwise making it available to you). Governing Law This Agreement, and your account(s), are governed by the laws and regulations of the United States and, to the extent applicable, the laws of the State of California, without regard to conflict of law principles. If state or federal law are inconsistent, or if state law is preempted by federal law, federal law governs. Unless otherwise provided in this Agreement, your accounts and services will be subject to applicable clearinghouse, Federal Reserve Bank and correspondent bank rules. You agree that we do not have to notify you of a change in those rules, except to the extent required by law CIT Group Inc. All rights reserved. FDIC Insured /15. III

4 I. DEPOSIT ACCOUNT AGREEMENT WELCOME TO ONEWEST BANK YOUR AGREEMENT WITH US Our Agreement Amendments and Changes in Account Terms FDIC Insurance Governing Law INFORMATION ABOUT YOU AND YOUR ACCOUNTS WITH US Customer Identification Program Credit Verification Telephone and Monitoring ACCOUNT OWNERSHIP Some General Information Transfer / Assignment Personal Accounts in General Business Accounts in General Payable-on-Death and Totten Trust Accounts GENERAL INFORMATION ABOUT TYPES OF ACCOUNTS Checking, Savings and Money Market Products Offered Checking Subaccounts Certificate of Deposit Products Offered PAYMENT OF OVERDRAFTS Payment of Overdrafts Overdraft Protection Plans ABOUT OUR POSTING ORDER General Posting Order Credit and Debit Categories for Posting Determination of Posting Order Posting Order and Overdraft Fees DEPOSITS AND COLLECTIONS Accepting Items for Deposit Verification and Collection Items Sent for Collection Lost Items Remotely Created Checks and Demand Drafts Delivery of Deposits and Verification Encoding Items for Deposit Endorsements Identifying Your Account for Deposits Correction of Deposit Errors Returned Items/Transactions Depositing or Cashing Substitute Checks FUNDS AVAILABILITY POLICY Your Ability to Withdraw Funds Longer Delays May Apply Special Rules for New Accounts Holds on Other Funds

5 WITHDRAWALS AND CHECK CASHING Cashing Checks Payable to You Cashing Your Checks Payable to Others Check Stock Converting Checks to Electronic Debits Examining Checks Voluntary Disclosure of Your Account Number Large Cash Withdrawals Paying Checks Drawn on Your Account Post-Dated Checks Missing Date or Stale-Dated Checks Substitute Checks and Image Replacement Copies Returning Unpaid Items to You SUBSTITUTE CHECKS AND YOUR RIGHTS What is a Substitute Check? What are Your Rights Regarding Substitute Checks? How do you Make a Claim for a Refund? COMMUNICATIONS, NOTICES AND STATEMENTS WE MAY SEND YOU About Sending Communications, Notices and Statements to You Delivery of Communications About Changes Check Images Change of Address Changes in Ownership and Authorized Signers PROTECTING YOUR ACCOUNTS Precautions You Should Take Closing a Compromised Account Lost or Stolen Checks REPORTING UNAUTHORIZED TRANSACTIONS AND PROBLEMS Types of Unauthorized Transactions Reviewing Statements and Reporting Unauthorized Use of Your Account Not Reporting Unauthorized Transactions Timely Our Investigation of Your Unauthorized Transaction Our Maximum Liability Business Accounts and Any Insurance Coverage FOREIGN CHECKS AND TRANSACTIONS What is a Foreign Item? Being Careful About Accepting Foreign Items Converting Currency and Exchange Rates Checks or Other Items in Foreign Currency OTHER TERMS AND CONDITIONS Automatic Transfer Service Using Your Checks and Pre-printed Deposit Slips Compliance Prohibition on Funding of Unlawful Internet Gambling Conflicting Claims to Funds or Other Property Check Processing Cutoff Hour Closing an Account Death or Incompetence

6 Facsimile Signature Indemnification Legal Process Items Multiple Signatures Not Required Withdrawal Notice Power of Attorney Retaining Records Right of Refusal Right to Set-Off Stop Payments Inactive and Unclaimed Accounts Severability ELECTRONIC FUND TRANSFER AGREEMENT AND DISCLOSURE Electronic Check Conversion Automated Teller Machine ( ATM ) and Debit Cards Telephone Banking Preauthorized / Automatic Transfers Online Banking Limitations Record of Your Transactions Our Liability for Failing to Make Transfers Your Liability for Unauthorized Electronic Fund Transfers Business and Other Non-Personal Accounts How to Stop Preauthorized Transfers from Your Account Lost or Stolen Card/PIN or Unauthorized Transaction In Case of Errors or Questions About Your Electronic Transfers Fees Business Days Privacy Change in Terms / Termination of Service WIRE TRANSFERS AND OTHER FUNDS TRANSFERS General Provisions Related Fees About Fedwire Sending Wire Transfers Receiving Wire Transfers and Certain Other Funds Transfers ACH Debits and Credits International ACH Transactions INCOME TAX WITHHOLDING RESOLUTION OF DISPUTES Resolution of Disputes: Arbitration Agreement Commencing an Arbitration Powers and Qualifications of Arbitrators No Class Action or Joinder of Parties SAFE DEPOSIT AGREEMENT AND DISCLOSURE Duties Access Default Remedies Notices

7 Termination Joint Owners Relocation of Box Liability II. CONSUMER PRODUCTS AND FEES CHECKING, SAVINGS, MONEY MARKET AND CD ACCOUNT DISCLOSURES Average Balance Statements Additional Rate Information Interest-Bearing Checking Account Balance Limitation Interest Compounding, Calculating and Crediting ATM and Debit Cards Daily Withdrawal Limits Savings and Money Market Accounts Are Limited Transaction Accounts Additional CD Account Disclosures Early Withdrawal Penalties Early Withdrawals Without Penalties Grace Period Renewals Additional Deposits Maturity Date and End of Term Individual Retirement Accounts (IRA) CONSUMER PRODUCT DESCRIPTIONS Personal Checking Premium Checking OneAccount Personal Savings Green Savings OneWest Premium Money Market Certificate of Deposit CONSUMER FEE SCHEDULE III. BUSINESS PRODUCTS AND FEES CHECKING, SAVINGS, MONEY MARKET AND CD ACCOUNT DISCLOSURES Rate Information Interest Compounding, Calculating and Crediting Average Balance Statements ATM and Debit Cards on Business Accounts Daily Withdrawal Limits Savings and Money Market Accounts Are Limited Transaction Accounts OneBusiness Platinum Money Market Checking Account Closure Fraud Prevention Additional CD Account Disclosures Early Withdrawal Penalties Early Withdrawals Without Penalties Grace Period Renewals

8 Additional Deposits Maturity Date and End of Term Retirement Accounts Institutional CDs Opened Through the Institutional Deposit Group BUSINESS PRODUCT DESCRIPTIONS OneBusiness Checking OneBusiness Interest Checking OneBusiness IOLTA OneAnalysis Checking OneBusiness Money Market Savings OneBusiness Platinum Money Market Certificate of Deposit Institutional Deposit Group Savings Institutional Deposit Group Money Market Savings BUSINESS FEE SCHEDULE IV. CASH MANAGEMENT SERVICES DESCRIPTION OF SERVICES Telephone Transfer Courier & Armored Transport Services Merchant Deposit Automated Clearing House (ACH) Services CD ROM Statements CD ROM Check Images Wire Transfers Lockbox Service Deposit Reconciliation Service Business Internet Banking Services Zero Balance Accounts / Targeted Balance Accounts Foreign Items Collection Items Remote Deposit Capture Cash Vault Services

9 I DEPOSIT ACCOUNT AGREEMENT WELCOME TO ONEWEST BANK Banking with OneWest Bank At OneWest Bank, we deliver friendly, personalized banking services, One Person at a Time. OneWest Bank was founded as a regional bank dedicated to customer service and a commitment to our community. We pride ourselves as a bank with a strong capital foundation, conservative management and a consistent focus on providing value to our customers. Thank you for banking with OneWest Bank. We look forward to serving you. Additional Services to Consider After you open your account, please consider these optional services that can help you manage your account. Debit Card. Use your debit card to pay for purchases at merchants that accept debit cards, to make deposits at OneWest Bank ATMs and to withdraw cash from ATMs. Direct Deposit. Have your paycheck, retirement benefits or other payments deposited electronically into your checking or savings account. Online Banking. Helps you manage your finances. Here are some of the things you can do using our Online Banking: (1) check your account balances and review transaction history; (2) transfer funds between your accounts; (3) receive your statements and paid checks online, then review or print them at your convenience; (4) reorder checks and change your address; and (5) place stop payments on checks you ve written. Online Bill Pay Service. Pay your bills electronically. Automatic Transfer Service. Helps make saving easier by automatically transferring funds from your checking account to your savings account. Overdraft Protection Service. Protects you from overdrafts and from us having to return checks you have written by automatically transferring available funds from your savings account or overdraft line of credit to your checking account. Ways to Access Your Account You can access your account and get information about our accounts and services: At our Branches and at OneWest Bank ATMs. Through our Online Banking Service at Through our Client Care Center at (877-PH-1-WEST). You can locate our nearest branch or ATM on our website at or by calling us at YOUR AGREEMENT WITH US Our Agreement This Account Disclosures booklet is designed for use with OneWest Bank s companion brochures, Annual Percentage Yield Disclosure and any applicable product or service addenda (together referred to as the Agreement ). The Agreement explains OneWest Bank s deposit accounts for both businesses and consumers, and other related services we make available to you, as well as the terms and fees that govern these accounts and services. By signing and returning the signature card for your account (also known as our Master Agreement ), you confirm that you have received this Agreement, and that you have reviewed, understood and agreed to the terms and conditions, fees and other information contained therein. We may add to, delete or change the terms of the Agreement at any time subject to applicable law. Except as indicated herein, we will inform you of changes that affect your rights and obligations. Throughout the Agreement, the words you, your and yours refer to the account owner or owners. Each person who signs the signature card is an owner of the account opened under that Agreement. We, us, the Bank and our refer to OneWest Bank. 6

10 The Agreement contains important information about your accounts. You are responsible for ensuring that all authorized signers on your account are familiar with our Agreement. We recommend you retain a copy of this Agreement (and any other notices the Bank provides you regarding changes to the Agreement) for as long as you maintain an account with us. Amendments and Changes in Account Terms We may change (add to, delete or alter) the terms of this Agreement with you at any time by mailing, ing or delivering a notice, a statement message or an amended Agreement to any of you at the last address (location or ) on file for you, your account or the service in question. Unless otherwise required by law, we may amend the Agreement without prior notice (e.g., by posting the information in our offices, on our website or otherwise making it available to you). FDIC Insurance Funds in your deposit accounts are generally insured up to $250,000 per depositor at OneWest Bank by the Federal Deposit Insurance Corporation (FDIC). FDIC provides separate coverage for deposits held in different account ownerships such as: (1) individual or single ownership accounts; (2) joint ownership accounts; (3) revocable trust accounts (including pay-on-death accounts); (4) corporations, partnerships and unincorporated association accounts; and (5) certain retirement accounts (including IRAs). To calculate your deposit insurance coverage, use the FDIC s Electronic Deposit Insurance Estimator (EDIE) at For questions about FDIC coverage limits and requirements visit or call toll-free at ASK-FDIC. Temporary Separate Coverage: All non-interest bearing transaction and IOLTA accounts are insured in full by the FDIC from December 31, 2010 through December 31, This temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000 available to depositors under the FDIC s general deposit insurance rules (as summarized above). Accounts with Sweep Arrangements: Funds transferred via an automatic sweep arrangement from any non-interest bearing transaction account to any interest bearing deposit account do not qualify for such temporary separate FDIC insurance coverage. Governing Law This Agreement, and your account(s), are governed by the laws and regulations of the United States and, to the extent applicable, the laws of the State of California, without regard to conflict of law principles. If state or federal law are inconsistent, or if state law is preempted by federal law, federal law governs. Unless otherwise provided in this Agreement, your accounts and services will be subject to applicable clearinghouse, Federal Reserve Bank and correspondent bank rules. You agree that we do not have to notify you of a change in those rules, except to the extent required by law. INFORMATION ABOUT YOU AND YOUR ACCOUNTS WITH US Customer Identification Program IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW ACCOUNT To help the government fight the funding of terrorism and money laundering activities, federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account. What this means to you: when you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We will also ask to see your driver s license and/or other identifying documents. In those instances where we are unable to complete identity verification using information from a third-party, we may at our discretion: (1) request that you present acceptable additional documentation; and (2) block deposit and withdrawal activity on the account until such time as the identity verification has been satisfactorily completed. In those instances where identity verification is not satisfactorily completed within a reasonable period of time after account opening and/or our notification to you of the same, we may, at our option, close the account and mail the proceeds to you in the form of a bank check. 7

11 Credit Verification By opening an account with the Bank, or by agreeing to be an owner or signer on an account or obtaining any other service from us, you (and, if acting in a representative capacity, individually and for such entity or principal) agree that we may obtain account experience information or credit information from consumer or credit reporting agencies and/or by any other means for you where permitted by law. We may do so at the time you open the account, at any time while your account is open, or after your account is closed if you owe us any amounts related to your account. If you do not handle your account in a satisfactory manner and/or it is necessary for us to charge off your account as a loss, we will report such negative information to check or credit reporting agencies. Telephone and Monitoring We may randomly monitor client service telephone conversations and electronic communications to ensure that you receive courteous and efficient service. When you communicate with us, you agree that your call or may be monitored without further notice to you. ACCOUNT OWNERSHIP Some General Information When you open an account with us, we may rely on information you give us and we maintain in our records. From this information we determine the type and ownership of the account opened. If you ask us to make a change to this information or any change to your account, and we agree to the change, the change will not be effective until we have had a reasonable period of time to act on the new information. For example, if you ask us to change one or more signers on your account, the request will not be effective until we have had enough time to review your request and act on it. If we ask you to give us additional documents or information, and you do not do so promptly, we may close your account. When we accept a deposit to an account or permit a withdrawal, we may rely upon the current ownership of the account, the information currently in our records, and the terms of this Agreement at the time we process the transaction. We are not obligated to inquire about the source or ownership of any funds we receive for deposit or about the use of funds withdrawn. When we permit a withdrawal from an account at the request of any signer (or the agent of any signer, as applicable), in accordance with the Agreement, the withdrawal is a release and discharge of the Bank from all claims regarding the withdrawal. If you open an account in the names of two or more individuals, and we later determine that one or more of them have not completed our account opening documents (or provided us with certain requested information), you agree to hold us harmless for our reliance on your initial instructions. We may in our discretion either: (1) treat the account as being owned by all persons in whose names the account was opened or; (2) treat the account as being owned solely by the persons who have completed our account opening documents. If we treat the account as owned by all persons in whose names the account was opened, we may permit any non-signing person to withdraw funds from the account or take any other action without any liability to you. We may require you at any time to close the account in order to remove a co-owner, terminate joint ownership or change a payable-on-death (POD) or trust designation. Transfer / Assignment All accounts are nontransferable except upon the books and records of the Bank. We may require surrender of the evidence of account. You may not grant, transfer or assign any of your rights to any account without prior written consent of the Bank. We are not required to accept or recognize an attempted assignment of your account or any interest in it. Personal Accounts in General Accounts such as individual, joint account (with or without right of survivorship), payable-on-death (POD), etc. are intended for personal, family or household purposes and may not be used for business or commercial purposes. If personal accounts are being used for business or commercial purposes, we reserve the right to either close the account or request that you present business documentation to substantiate the existence of the business and change the account to an appropriate business account type. 8

12 Business Accounts in General Accounts for such entities as corporations, limited liability companies, partnerships, etc. are intended for business and commercial purposes and may not be used for personal, family or household purposes. If any of these accounts are being used for personal, family or household purposes, we reserve the right to either close the account or request that you change the account to an appropriate personal account type. Payable-on-Death (POD) and Totten Trust Accounts (ITF) Payable-on-death and Totten Trust accounts are accounts which are payable on request to one or more depositors during their lifetimes and, upon the death of the last depositor, to one or more designated beneficiaries or payees. If there is more than one surviving beneficiary or payee, each will receive an equal share of the account unless the Master Agreement (signature card) provides differently. We may require joint instructions of, or payments to, all beneficiaries or payees. GENERAL INFORMATION ABOUT TYPES OF ACCOUNTS Checking, Savings and Money Market Products Offered We offer a range of checking (both variable rate interest bearing and non-interest bearing), variable rate savings and money market accounts (with limited check writing) that will suit the banking needs of consumers and businesses. Please refer to the Consumer Product and Fees and Business Product and Fees sections for account details and eligibility. Checking Subaccounts The following applies to all checking accounts. For regulatory reporting and reserve purposes, we divide checking accounts into two subaccounts: a checking subaccount and a savings subaccount. If your checking account earns interest, we will pay the same interest rate on both subaccounts. If it does not earn interest, no interest will be paid on either subaccount. In either case, your account will continue to operate, from your perspective, as one account. We may establish a threshold for the balance maintained in the checking subaccount and may transfer funds periodically from one subaccount to the other to meet that threshold and cover transactions against your account. Your account statements will not reflect the existence of the subaccounts, and our periodic reallocation of funds between subaccounts will not affect your ability to withdraw funds, the interest rate (if any), fees or other features of your checking account. You agree that we may treat the subaccounts as one and the same account if we receive a levy, subpoena or other legal process regarding either subaccount or your checking account. Certificate of Deposit Products Offered We offer a range of certificate of deposit accounts with terms ranging from 30 days to 5 years. From time to time we may offer certificates of deposit for longer terms. Please refer to our Consumer Product and Fees and Business Product and Fees sections for account details and eligibility. PAYMENT OF OVERDRAFTS Payment of Overdrafts We are not obligated to pay any item presented for payment against your account if your account does not have sufficient funds available. If we pay a transaction by overdrawing your account, we are not obligated to continue paying such transactions and creating or increasing overdrafts in the future. We may stop paying checks and other items which create overdrafts at once without notice to you. You are liable to us to repay any overdrafts on your account whether you created them or not. If you do not pay us, and we take collection action against you, you agree to pay for any costs of collection. We may terminate, without notice, any account with excessive insufficient funds activity, and report the account to a consumer-reporting agency. There is a fee associated with each transaction that we either pay, which results in an overdraft, or do not pay, which would have resulted in an overdraft had we paid it (usually due to insufficient or unavailable funds). Such a fee may apply to overdraft transactions created by check, recurring debit card transactions, automated clearing house (ACH) debit and by certain other electronic means 9

13 as permitted by law. We will not apply a fee to overdraft transactions created by one-time debit card transactions or ATM transactions. The maximum number of overdrafts due to insufficient or unavailable funds that will be subject to an overdraft charge in one day is four (4). The minimum overdraft amount due to insufficient or unavailable funds that will be subject to an overdraft charge is $5.00. Refer to the Consumer Fee Schedule and the Business Fee Schedule sections for fee information. Overdraft Protection Plans The Bank offers the following overdraft protection plans. Savings Overdraft Transfer Service: With this service, you authorize the Bank to make transfers of available funds automatically from your savings account to cover overdrafts in your checking account. Transfers from your savings account are made in the exact amount of the overdraft. Each transfer counts as one of the six (6) limited transactions you are allowed each month from your savings or money market account. Please refer to the Savings and Money Market Accounts are Limited Transaction Accounts paragraph in our Consumer Product and Fees and the Business Product and Fees sections for further details. You must request to enroll into this service. Refer to the Consumer Fee Schedule and the Business Fee Schedule sections for any fees associated with this service. Overdraft Line of Credit: This is a revolving line of credit, which is available to clients meeting certain credit requirements. With this plan, you authorize the Bank to automatically advance the exact amount of your overdraft from your Overdraft Line of Credit (linked to your checking account) to cover your overdraft, up to your credit limit. You must repay what you have borrowed in full or in minimum monthly installments (in addition to any late charges, finance charges and annual fees). You authorize us to deduct the minimum payment from the linked checking account. If you apply for the Overdraft Line of Credit, you will be provided with our Overdraft Line of Credit Agreement and Disclosure. ABOUT OUR POSTING ORDER General Posting Order We ordinarily post items within certain debit categories from the lowest to highest dollar amount, regardless of the order in which they occur or we receive them. Refer to Credit and Debit Categories for Posting below for more information. Credit and Debit Categories for Posting We may establish, at our discretion, different categories of debits and credits, and then determine posting orders within each category. A category may include more than one type of debit or credit. Debit categories may include checks, debit card purchases, withdrawals (in-person, via ATM, preauthorized and online), payments and various fees. Credits that may be included in a credit category for posting may include teller deposits, direct deposits and other types of credits. For example, we may treat ATM withdrawals and debit card purchases as one category, and on-us checks as another category, and then post ATM withdrawals and debit card purchases before we process and post checks. We may change categories and orders within categories at any time without notice. We may change our posting order at any time without notice to you. We may give preference to debits payable to us. On your account statement we do not necessarily report debits and credits in the order that we posted them to your account. Determination of Posting Order We do not post credits and debits to your account in the order in which they occur or we receive them. Sometimes they are not posted to your account on the same day that they occur. For example, when you write a check or use your debit card to make a purchase, the merchant or the person or business from whom you made the purchase may not present the check or debit charge to us for payment until several days later. We may treat credits and debits to your account which we receive on any day as if we received all of them at the end of that day and post them in the order we determine. 10

14 Posting Order and Overdraft Fees Some posting orders may result in more overdraft items and returned items fees than other posting orders. We may choose our processing and posting orders regardless of whether additional fees may result. You can avoid overdraft fees by making sure that your account always contains sufficient available funds to cover all of your withdrawals and debits. You may also want to consider one of our Overdraft Protection Plans as a possible way to avoid certain overdraft fees. Please refer to the Payment of Overdrafts section. DEPOSITS AND COLLECTIONS Accepting Items for Deposit We may accept items for deposit, accept items for collection only, refuse items for deposit or return all or part of any deposit. If we accept checks or other items for deposit to your account or cash them, you are responsible for the checks and other items if there is a subsequent problem with them. We may accept a check or other item for deposit to your account from anyone. We do not have to question the authority of the person making the deposit. We may refuse to accept for deposit to your account items payable to another person. If we cash a check or other item for you or deposit it to your account and it is not paid for any reason, we will charge your account for the amount of the check or other item, even if this causes your account to become overdrawn. All deposits are subject to our subsequent verification and adjustment, even if you have already withdrawn all or part of the deposit. If we accept checks or other items for deposit or collection, we act only as your collecting agent and assume no responsibility beyond ordinary care. We are not responsible for errors and delays made by other institutions in the collection process. When you send us deposits by mail, we treat them as received at the time we receive actual delivery of the deposit. If you place deposits in our night depository, we treat them as received when we remove the deposits from the depository. If you give us cash that we later determine to be counterfeit, we will charge your account for the amount we determine to be counterfeit. You will not knowingly deposit items into your account that do not have either a true original signature of the person on whose account it is drawn or an authorized reproduction of that person s signature. Verification and Collection We may deduct funds from your account if an item is lost, stolen or destroyed in the collection process, if it is returned to us unpaid or if it was improperly paid, even if this causes your account to become overdrawn. Items Sent for Collection We and other institutions may refuse to accept a check or other item for deposit or may accept it on a collection basis only. This often occurs with foreign, questionable or damaged items. If we accept an item for collection, we will send it to the institution upon which it is drawn, but will not credit your account for the amount until we receive the funds from the other institution. If we elect to credit your account before then, we may charge the amount back against your account if we do not receive payment for any reason even if this causes your account to be overdrawn. We may impose a fee in connection with sending and receiving items for collection (e.g., by charging your account or deducting the fee from the amount remitted). Other institutions that send or receive items for collection involving your account also may impose a fee for their services. Lost Items We act only as your collection agent when receiving items for deposit or encashment. You should be aware that we reserve the right to reverse the credit for any deposited item or charge your account for cashed items should they become lost, mutilated, or destroyed while in the process of 11

15 collection. If we do not reverse a credit, you agree to assist us in collecting the amount of any lost items by providing us with such information and other assistance as we request. We may charge your account when a photocopy of a check you have written is presented to us for payment in place of a lost original, unless a stop payment order is in effect for the check. Remotely Created Checks and Demand Drafts If you provide your account number to a third party in order to charge your account by means of one or more remotely created checks or demand drafts (i.e., items which do not bear your actual signature, but purport to be drawn with your authorization), you authorize us to pay such items, even though they do not contain your signature and may exceed the amount you authorized to be charged. This provision shall not obligate us to honor such items. We may refuse to honor such items without cause or prior notice, even if we have honored similar items previously. You agree to indemnify, defend and hold us harmless from every loss, expense and liability related to a claim that such items were not authorized (e.g., as to their amount and payee) by the persons on whose accounts the items were drawn. You may not deposit remotely created checks or demand drafts to an account with us without our prior, express written consent. Delivery of Deposits and Verification You may present deposits to us through various channels including one of our branches, ATMs, night depositories, mail or other means that we may make available. We may use the channel and time of delivery to determine when you receive credit for the deposit. If we credit your account for the amount shown on the deposit ticket, the credit is subject to subsequent verification by us and our determination of the deposit amount is final. If you provide an endorsement or encode the amount on an item deposited to your account, such encoding must adhere to all federal and state law requirements as well as banking industry practice. If we authorize you to use a deposit bag or envelope, you authorize us to open the deposit bag or envelope in your absence and credit the deposit contained therein to your account upon our verification of the contents. If you make your deposit through a night depository, you agree to exercise reasonable care in opening, closing and properly securing the depository. Encoding Items for Deposit If you are a business client, you may ask us for permission to encode the MICR (Magnetic Ink Character Recognition) line of an item you deposit with us. If we allow this, you agree to follow the instructions we give you for preparing and encoding such deposits. However, if you make an encoding mistake that results in losses or damages to us, you agree to reimburse us for such losses and damages, and we may charge them to your account. We are not liable for any costs, losses or damages you may incur when you encode your own items. If our equipment is unable to read a significant number of your encoded items, we may refuse to accept some or all of your items and we may charge you fees for each item we do accept. You must provide us with a replacement or a copy of each original check if the deposit is lost or destroyed. Endorsements You authorize the Bank to supply your endorsement on any item that the Bank accepts for collection, payment or deposit to your account. You also authorize the Bank to collect any unendorsed item that is made payable to you without first obtaining your endorsement, provided the item was deposited to your account. The Bank may refuse to pay or cash any item or accept any item for deposit or collection unless it is able to verify to its satisfaction that all of the necessary endorsements are present on the item. For example, the Bank may require that all endorsers be present at the time that an item is presented to the Bank for payment, encashment, deposit or collection. If you issue a check that contains a carbon band, printing, endorsements or other material on the back of the check outside the area extending 1½ inches from the trailing edge of the check, that material could also interfere with endorsements by other banks and cause delays in returning the check. Similarly, if you or a prior endorser signs, stamps or affixes an endorsement to a check for deposit which is outside of the area extending 1½ inches from the trailing edge of a check, that material could also interfere with endorsements by other banks and cause delays in returning the check. Therefore, you agree that the Bank shall not be liable to you for, and you will indemnify and hold the Bank harmless from any and all claims, loss, costs and expenses (including reasonable attorneys fees and the costs of litigation) that the Bank or you may incur as a result of the late 12

16 return of a check caused by carbon band, printing, endorsements or other material on the back of any check drawn on or deposited to your account that extend outside the area extending 1½ inches from the trailing edge of the check. The trailing edge is defined as the left side of the check when viewing it from the front. Identifying Your Account for Deposits You are responsible for correctly identifying the account to which you want funds deposited or payments made. We may credit a deposit to an account based solely on the account number listed on the deposit slip or other instruction to credit an account, even if the name on the deposit slip or other instruction differs from the name on the account. You are responsible for any cost, loss or damage caused by your failure to properly identify the account to which a deposit is to be made. Correction of Deposit Errors When we receive your deposits, we may provisionally credit your account for the amount indicated on the deposit slip, subject to later verification by us. You must ensure that the amount indicated on the deposit ticket is correct even if you did not prepare the deposit ticket. If we later determine that the amount indicated on the deposit ticket is incorrect, we may make the appropriate debit or credit adjustment to your account. However, if in our determination the error on the deposit ticket was inadvertent and is less than our standard adjustment amount, we will not adjust the amount of deposit to your account unless you notify us of the error within one year of the date of your periodic statement that shows the deposit. After this notification period has expired and you have not brought any error to our attention, the deposit amount indicated on the statement will be considered final. Returned Items / Transactions If we are notified that an item you cashed or deposited is being returned unpaid, we may attempt to reclear the item at our discretion, place a hold on the funds in question (refer to the Funds Availability Policy section) or charge your account for the amount (and any interest earned on it), whether or not the return or notice of non-payment is proper or timely. This also applies to checks drawn on us which are not paid for any reason, and to checks that are returned to us in accordance with any law, regulation or rule (including a clearinghouse rule). We may assess a fee for each returned item and notify you of the return orally, electronically or in writing. If we receive an affidavit or a declaration under penalty of perjury stating that an endorsement on an item deposited to your account is forged, that the item contains an alteration or that there has been a breach of warranty in connection with the item, we may charge the item back against your account or place a hold on the funds pending an investigation, without prior notice to you. Depositing or Cashing Substitute Checks You agree that you will not cash or deposit substitute checks as defined by federal law or Image Replacement Documents ( IRDs ) that purport to be substitute checks and have not been previously endorsed by a bank without our prior permission. If you cash or deposit such an item, you give us the same warranties and indemnities that we would give under applicable law as a reconverting bank. You further agree to reimburse us for losses, costs, damages and attorneys fees we may incur as a result of such action. If you provide us with an electronic representation of a substitute check for deposit into your account instead of an original check, you agree to reimburse us for all losses, costs and damages we incur because the resulting substitute check (from the electronic representation) does not meet the requirements for legal equivalence or causes duplicate payments. FUNDS AVAILABILITY POLICY Your Ability to Withdraw Funds Our policy is generally to make funds from your check deposits with us available to you on the first business day we are open after the day we receive your deposit. Once the funds are available, you can withdraw the funds in cash and we will use the funds to pay checks you have written. Cash, incoming wire transfers and electronic direct deposits will be available on the day we receive the deposit. For determining the availability of your deposits, every day is a business day, except Saturday, Sunday and Federal holidays. If we receive your deposit at one of our branches on a day 13

17 other than a business day or on a day we are not open, the deposit will be considered received on the next business day. If you make a deposit at one of our automated teller machines (ATM) before 3:00 PM on a business day we are open, we will consider that the day of deposit. If you make a deposit at one of our night depositories before 8:00AM on a business day we are open, we will consider that the day of deposit. Deposits made after these times will be considered received on the next business day. Times may vary slightly by location and will be posted on affected ATMs and night depositories. Cash deposits at our ATMs will be available on the next business day following the day we receive the deposit. Longer Delays May Apply In some cases, we will not make all of the funds that you deposit by check available to you the next business day after we receive your deposit. Funds you deposit by check may be delayed for a longer a period of time under certain circumstances, including the following: We believe a check you deposit will not be paid. You deposit checks totaling more than $5,000 on any one day. You redeposit a check that has been returned unpaid. You have overdrawn your account repeatedly in the last six months. There is an emergency, such as failure of computer or communications equipment. We will notify you if we delay your ability to withdraw funds for any of these reasons, and we will tell you when the funds will be available. They will generally be available no later than the seventh business day after the date of your deposit. If your deposit is not made directly to one of our employees, or if we decide to take this action after you have left the premises, we will mail you the notice by the following business day after we receive your deposit. If you will need the funds from a deposit right away, you should ask us when the funds will be available. Special Rules for New Accounts If you are a new client, the following special rules apply during the first 30 calender days that your account is open. Funds from cash, wire transfers and electronic direct deposits to your account will be available on the day we receive the deposit. The first $5,000 of a day s total deposits of cashier s, certified, teller s, traveler s and federal, state and local government checks will be available on the first business day after the day of your deposit if the deposit meets certain conditions. For example, the checks must be payable to you. The excess over $5,000 will be available on the seventh business day after the day of your deposit. If your deposit of these checks (other than a U.S. Treasury check) is not made in person to one of our employees, the first $5,000 will not be available until the second (2nd) business day after the day of your deposit. Funds from all other check deposits will be available on the seventh business day after the day of your deposit. Holds on Other Funds If we cash a check for you that is drawn on another bank, we may withhold availability of a corresponding amount of funds that are already in your account. Those funds will be available at the time funds from the check we cashed would have been available if you had deposited it. If we accept for deposit a check that is drawn on another bank, we may make funds from the deposit available for withdrawal immediately, but delay your availability to withdraw a corresponding amount of funds that you have on deposit in another account with us. The funds in the other account would then not be available for withdrawal until the time periods that are described elsewhere in this disclosure for the type of check that you deposited. WITHDRAWALS AND CHECK CASHING Cashing Checks Payable to You We may occasionally refuse to cash a check payable to you (for example, if we doubt the collectability of a check). If we do cash such a check and it is returned to us unpaid for any reason at any time, we may deduct the amount of the check from your account (including any related fee) even if this causes your account to become overdrawn. We may cash checks payable to any signer on your account when endorsed by any other signer. If you request that we cash a check for you, 14

18 we may apply the proceeds of the check encashment to any fees, overdrafts and other amounts you owe us. Cashing Your Checks Payable to Others If a person wants to cash your check in one of our branches, we may: require identification satisfactory to us, charge them a fee for cashing the check; and impose additional requirements, such as requiring their fingerprint on the check. If the person with your check fails or refuses to satisfy our requirements, we may refuse to cash the check. We are not liable to you for refusing to cash the check or for charging a check-cashing fee. Check Stock You agree to bear the costs, losses and damages as a result of your use of check stock that contains defects, such as printing inaccuracies, faulty magnetic ink, faulty encoding or duplicate check numbers. Checks you write may be converted into electronic images during the check collection and return process. You also agree to bear the risk of loss if: you elect to have your checks printed by a vendor that has not been approved by us; you use check stock or features (including security features) that cause important data to disappear or be obscured when converted to an electronic image; or you write your check in a way that causes critical data to disappear or to be obscured when converted to an electronic image. Converting Checks to Electronic Debits Some businesses convert checks that you give them into electronic debits and then send us the electronic debit for the transaction amount. When we receive the electronic debit, we charge it to your account. We may receive the electronic debit to your account immediately after the business enters the transaction, so you may incur an overdraft fee if you do not have sufficient funds in your account to cover the amount of the check. Since the check is not sent to us, we do not have a copy of your check. We list these electronic debits on your account statement. If the business uses your check to initiate an electronic debit at the point of sale, the business should give you notice of the conversion of the check and return the voided check to you. You should treat the voided check with care because someone else who obtains possession of it could use the information to initiate additional debits against your account. Examining Checks We receive many checks for deposit and encashment each business day. Compliance with expedited funds availability regulations require us to use automated check processing procedures which may not allow us time to examine every check presented. Although we may visually review a sample of checks presented from time to time, reasonable commercial standards do not require us to do so. We select some checks for review based on certain criteria that we may establish and change at our discretion. Using automated check processing procedures means that most checks are processed on the basis of the MICR (Magnetic Ink Character Recognition) line printed along the bottom edge of the check, and are not individually examined for dates, maker signatures, endorsements, etc. You agree that we will have exercised ordinary care if we examine only those items that we have identified according to the criteria that we may establish at our discretion. When we do visually examine any check, we may disregard any restrictive instructions or notations (e.g., pay only on two or more signatures). We may return the item unpaid if, in our opinion, it does not bear a signature matching any specimen signature we have on file for your account. You agree that we will not be liable to you for honoring any check bearing a signature that resembles, in our opinion, the specimen signature on file with us. Since we do not individually examine most checks, it is important for you to secure your checks, promptly review your account statement and immediately report any suspicious or unauthorized activity to us. You agree that automated processing of your checks is reasonable and that you accept responsibility for preventing and reporting forgeries, alterations and other unauthorized uses of your checks or accounts. You further agree that the exercise of ordinary care will not require us to detect forgeries or alterations that could not be detected by a person observing reasonable commercial standards. We may elect in some cases to make further inquiries about certain checks that are presented for payment against your account. In these instances, if we are unable to contact you to determine with reasonable 15

19 certainty that you authorized these payments, we may either pay the checks or return them unpaid without any liability to you. Voluntary Disclosure of Your Account Number If you voluntarily disclose your account number to another person through any means, you are deemed to authorize each item, including electronic debits, which result from your disclosure. We may pay these items and charge your account. Large Cash Withdrawals Cash withdrawals or payments to you at any branch may be restricted due to the limited amount of currency on hand. If we do not have sufficient cash for a large withdrawal or payment, we may make arrangements for a later cash payment or offer to make payment with a bank check. We may also require reasonable advance notice for large cash withdrawals. We assume no responsibility to provide personal protection for customers who elect to carry large sums of money off our premises. Paying Checks Drawn on Your Account We may debit your account for a check or other item drawn on your account either on the day it is presented to us for payment or on the day we receive notice that the item has been deposited for collection at another financial institution - whichever is earlier. If you do not have sufficient available funds to cover the item, we will decide whether to return it or to pay it and overdraw your account. We may determine your balance and make our decision on an insufficient funds item at any time between our receipt of the item or notice and the time we must return the item. We are required to determine your account balance only once during this time period. When you deposit checks or other items that are drawn on another account with us, we may treat such items as presented to us for payment on the business day that they are received by our department that processes checks drawn on the other account. Post-Dated Checks We generally do not accept post-dated checks (i.e., a check with a date in the future). However, if one is presented for payment, we may pay the check and charge it to your account even if it is presented for payment before the date stated on the check. If you do not want us to pay a staledated or postdated check, you must place a stop payment order on it. Refer to Stop Payments in the Other Terms and Conditions section of this booklet. Missing Date or Stale-Dated Checks Regardless of the date on a check you have written, whether missing or stale-dated (a date more than 6 months in the past), we may pay or reject the check (at our discretion) whenever it is presented for payment. You agree that we are not required to identify stale-dated checks, checks with missing dates or to seek your permission to pay them. If you do not want us to pay any check for any reason, you must place a stop payment order on the check. Refer to Stop Payments in the Other Terms and Conditions section of this booklet. Substitute Checks and Image Replacement Copies In some cases, we may be sent an indemnified copy of your original check, an Image Replacement Document (IRD), a substitute check or an image of your check, instead of the original item. We may act upon presentment of an indemnified copy, IRD, substitute check or image of your check and pay these items against your account, just as if the original item had been presented. Returning Unpaid Items to You If we decide not to pay a check or other item drawn on your account, we may return the original, an image or a copy of the item, or we may send an electronic notice of return and keep either the original, an image, or a copy of the item in our records. If we send an electronic notice of return, you agree that any person who receives that electronic notice may use it to make a claim against you to the same extent and with the same effect as if we had returned the original item. 16

20 SUBSTITUTE CHECKS AND YOUR RIGHTS The following provisions explain some of the rights a consumer has under a federal law often referred to as Check 21. Check 21 was enacted to increase the efficiency of the U.S. check clearing system. The check clearing system has historically relied heavily on the physical transport of checks between banks. Check 21 allows banks to create substitute checks and present them to other banks instead of the original check. This reduces the transport of checks among banks and facilitates the electronic collection of checks. What is a Substitute Check? To make check processing faster, federal law permits banks and businesses to replace original checks with substitute checks. These checks are similar in size to original checks with a slightly reduced image of the front and back of the original check. The front of a substitute check states: This is a legal copy of your check. You can use it the same way you would use the original check. You may use a substitute check as proof of payment just like the original check. Some or all of the checks that you receive back from us may be substitute checks. This notice describes rights you have when you receive substitute checks from us. The rights in this notice do not apply to original checks or to electronic debits to your account. However, you have rights under other laws with respect to those transactions. What are your Rights Regarding Substitute Checks? In certain cases, federal law provides a special procedure that allows you to request a refund for losses you suffer if a substitute check is posted to your account (for example, if you think that we withdrew the wrong amount from your account or that we withdrew money from your account more than once for the same check). The losses you may attempt to recover under this procedure may include the amount that was withdrawn from your account and fees that were charged as a result of the withdrawal (for example, bounced check fees). The amount of your refund under this procedure is limited to the amount of your loss or the amount of the substitute check, whichever is less. You also are entitled to interest on the amount of your refund if your account is an interestbearing account. If your loss exceeds the amount of the substitute check, you may be able to recover additional amounts under other laws. If you use this procedure, you may receive up to $2,500 of your refund (plus interest if your account earns interest) within 10 business days after we received your claim and the remainder of your refund (plus interest if your account earns interest) not later than 45 calendar days after we received your claim. We may reverse the refund (including any interest on the refund) if we later are able to demonstrate that the substitute check was correctly posted to your account. How do you Make a Claim for a Refund? If you believe that you have suffered a loss relating to a substitute check that you received and that was posted to your account, please contact us. You may call us at or write to us at P.O. Box 471, Santa Monica, CA You must contact us within 40 calendar days of the date that we mailed (or otherwise delivered by a means to which you agreed) the substitute check in question or the account statement showing that the substitute check was posted to your account, whichever is later. We will extend this time period if you were not able to make a timely claim because of extraordinary circumstances. Your claim must include: (1) a description of why you have suffered a loss (for example, you think the amount withdrawn was incorrect); (2) an estimate of the amount of your loss; (3) an explanation of why the substitute check you received is insufficient to confirm that you suffered a loss; and (4) a copy of the substitute check and/or the following information to help us identify the substitute check: the check number, the name of the person to whom you wrote the check, the amount of the check. COMMUNICATIONS, NOTICES AND STATEMENTS WE MAY SEND YOU About Sending Communications, Notices and Statements to You You should promptly review all notices, account statements and other communications (hereafter referred to as communications ) we send you. Many communications will inform you of changes affecting your rights and obligations. When we send communications we may: address notices to one account owner; 17