Reg DD Disclosures

Notice of Changes to “Important Account Information for Our Members” in Our New Accounts Booklet

Please note that the following additions/changes are effective July 1, 2006

TERMS AND CONDITIONS OF YOUR ACCOUNT

DEPOSIT OF FUNDS – FINAL PAYMENT - If final payment is not received, we may charge your account for the amount of such items or ACH transfers and impose a return item charge on your account. Any collection fees we incur may be charged to your account. We reserve the right to refuse or return any item or funds. We have the right to charge-back against your account all previously deposited items or other items endorsed by you that are returned to us unpaid, regardless of whether the amount of the item has been available for your use. We may debit your account into overdraft on a charge-back situation, and not be liable for damages to you as a result of the charge-back. Nothing in this Agreement shall be construed to require us to debit the account into overdraft or to create an arrangement for the extension of credit by means of overdrafts.

OVERDRAFTS - If at any time, the available funds in your account are not sufficient to cover checks and other items presented for payment on your account, those checks and items will be handled in accordance with our overdraft procedures. Your account will then be subject to a charge for the item whether paid or returned as set forth in our fee schedules. Except as otherwise agreed in writing, we, by covering one or any overdraft, do not agree to cover overdrafts in the future and may discontinue covering overdrafts at any time. If we pay a check or draft that would otherwise overdraw your account, you agree to pay the overdraft amount immediately. We reserve the right to pursue collection of previously dishonored items at any time. If we have approved an overdraft protection plan for your account, we will honor drafts drawn on insufficient funds by transferring funds from a share account or another deposit account or a loan account, as you have directed. No more than 6 transfers may be permitted in any calendar month from deposit accounts. Once the transfer total for the month has reached 6, any insufficient funds items will be handled in accordance with our regular overdraft procedures. The fee for these overdraft transfers and excessive transfers, if any, is set forth in our fee schedules.

RIGHT TO PAY OR RETURN - If paper check, debit card transaction, ACH transaction, website transaction or audio response transaction is presented without sufficient funds in your account to pay it, we may, at our discretion, pay the item (creating an overdraft) or return the item (NSF). We will not honor overdrafts of any type from the ATM or over the counter with a teller. While we reserve the right to pay or not pay any item presented without sufficient funds, you may request that we not pay such items. In that case, we will return any item presented without sufficient funds (NSF). If you wish to exercise this option you must contact us by calling us at (281) 243-0500 or writing us at Houston Federal Credit Union, 16320 Kensington Drive, Houston, TX 77479 and informing us that you do not want us to pay any items presented without sufficient funds. If you do not notify us, we retain the right, in our discretion, to pay or not pay any item presented without sufficient funds. The amounts of the overdraft and NSF fees are disclosed elsewhere. We encourage you to make careful records and practice good account management. This will help you to avoid writing checks or drafts without sufficient funds and incurring the resulting fees.

MULTIPLE-PARTY ACCOUNTS - Any account owner may withdraw all funds in the account, stop payment of items drawn on an account, transfer, or pledge to us all or any part of the shares of any account without the consent of the other account owner(s) and we shall have no duty in such event to notify any other account owner(s). We reserve the right at any time to require written consent of all account owners for a change of ownership or termination of a multiple-party account. If we receive written notice of a dispute between account owners or receive inconsistent instruction from them, we may: (1) suspend or terminate the account; (2) require an account owner to obtain a court order in order to take any action on a transaction; or (3) require that all account owners agree in writing to any transaction concerning the account.

STOP PAYMENTS - Stop Payment Order Request. You may request a stop payment order on any draft drawn on your account. To be binding an order must be dated, signed, and describe the account and draft number and the exact amount. The stop payment will be effective if we receive the order in time to act upon the order and you state the number of the account, number of the draft, and its exact amount. You understand that the exact information is necessary for our processing system to identify the draft. If you give us incorrect or incomplete information, we will not be responsible for failing to stop payment on the draft. If the stop payment order is not received in time for us to act upon the order, we will not be liable to you or to any other party for payment of the draft. If we recredit your account after paying a draft over a valid and timely stop payment order, you agree to sign a statement describing the dispute with the payee, to transfer to us all of your rights against the payee or other holders of the draft and to assist us in any legal action. A release of the stop payment request may be made only by the person who initiated the stop payment order.

Our stop payment cutoff time is one hour after the opening of the next banking day after the banking day on which we receive the item. Additional limitations on our obligation to stop payment are provided by law (e.g., we paid the item in cash or we certified the item).

Duration of Order. You may make an oral stop payment order that will lapse within fourteen (14) calendar days unless confirmed in writing within that time. A written stop payment order is effective for six (6) months and may be renewed in writing from time to time. We do not have to notify you when a stop payment order expires.

Liability. Fees for stop payment orders are set forth on the Truth-in-Savings Disclosure. You may not stop payment on any certified check, cashier’s check, teller’s check, or any other check, draft, or payment guaranteed by us. Although payment of an item may be stopped, you may remain liable to any item holder, including us. You agree to indemnify and hold us harmless from all costs, including attorney’s fee, damages or claims related to our refusing payment of an item, including claims of any joint account owner, payee, or endorsee in failing to stop payment of an item as a result of incorrect information provided by you.

FINANCIAL DATA VERIFICATION - You agree that we are authorized to verify financial information, data, and employment history by any necessary means, including obtaining a consumer report by any consumer-reporting agency.

ELECTRONIC FUND TRANSFERS – YOUR RIGHTS AND RESPONSIBILITIES

ATM Transactions – types of transfers, dollar limitations, and charges – You may access your account(s) by ATM using your ATM card or Visa® Check Card and personal identification number, to:

• make deposits to checking account(s) on HFCU ATMs where available
• make deposits to share (savings) account(s) on HFCU ATMs where available
• get cash withdrawals from checking account(s)
• get cash withdrawals form share (savings) account(s)
• the dollar limit will be arranged at account opening up to a maximum of $500.00 per day which will be an aggregate of all accounts you have with us.
• there is a charge per withdrawal at ATMs we do not own or operate (see separate fee schedule)
• transfer funds from share (savings) to checking account(s) only at ATMs we own and operate
• transfer funds from checking to share (savings) only at ATMs we own and operate
• we will not honor overdrafts of any type from the ATM.
• get information about:
• the account balance of your checking accounts
• the account balance of your share (savings) accounts

Types of ATM/Point-of-Sale Transactions – You may access your checking account(s) to purchase goods (in person), and get cash from a merchant, if the merchant permits, or from a participating financial institution. We may honor overdrafts of electronic transaction types such as but not limited to debit card, ACH, POS, or online banking.

eCheck Bill Payment Service – You may access your account(s) by computer through the Internet at www.houstonfcu.org using your account numbers and your password, to:

• make payments for checking to third parties
• this service is free (see separate fee schedule)

UNAUTHORIZED TRANSFERS

a. Consumer liability.

• Additional Limit on Liability for Visa® Check Card. Unless you have been grossly negligent or have engaged in fraud, you will not be liable for any unauthorized transaction using your lost or stolen Visa® Check Card. This additional limit or liability does not apply to ATM transactions, to transactions using your Personal Identification Number which are not processed by VISA®.

NOTICE OF ATM/NIGHT DEPOSIT FACILITY USER PRECAUTIONS

6. Protect the secrecy of your Personal Identification Number (PIN). Protect your ATM card as though it were cash. Don’t tell anyone your PIN. Don’t give anyone information regarding your ATM card or PIN over the telephone. Never enter your PIN in any ATM that does not look genuine, has been modified, has a suspicious device attached, or is operating in a suspicious manner. Don’t write your PIN where it can be discovered. For example, don’t keep a note of your PIN in your wallet or purse.

TRUTH-IN-SAVINGS DISCLOSURE

CHECKING (SHARE DRAFT) ACCOUNT
(NON-DIVIDEND EARNING)

Minimum balance requirements:

• The minimum balance required to open this account is $25.00.

Transaction limitations:

• No transaction limitations apply to this account unless otherwise stated in the Common Features.