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Overdraft Privilege Policy (Service Description) 

(A Discretionary Overdraft Service)

It is the policy of the Carlsbad National Bank to comply with applicable laws and regulations, and to conduct business in accordance with applicable safety and soundness standards. A non-sufficient funds (overdraft/negative) balance may result from: A) The payment of checks, electronic funds transfers, or other withdrawal requests you initiate; B) Payments authorized by you; C) The return, unpaid, of items deposited by you; D) Charging your account for applicable service charges and fees; or E) The deposit of items to your account which according to the Carlsbad National Bank's Funds Availability Policy, are treated as not yet "available" or finally paid. We are not obligated to pay any item initiated for payment if your account does not contain sufficient collected funds

Rather than automatically returning, unpaid, any non-sufficient funds items that you may have, if your "eligible account type" (primarily used for personal and household purposes) has been open for at least sixty (60) days and thereafter you maintain your account in good standing, which includes at least: (A) Continuing to make deposits consistent with your past practices, and depositing at least $400 or more in your account within each thirty (30) day period, (B) You are not in default on any loan obligation to The Carlsbad National Bank, (C) You bring your account to a positive balance (not overdrawn) at least once every thirty (30) days. You have no legal right to defer payment of your outstanding overdrafts including our fees, and (D) Your account is not the subject of any legal or administrative order or levy, such as bankruptcy or a tax lien, we will consider, without obligation on our part, approving your reasonable overdrafts up to your assigned Overdraft Privilege Limit. This discretionary* service will generally be limited to a $400 overdraft (negative) balance for Convenience Checking accounts or a $700 overdraft (negative) balance for Premier Checking, Interest Checking, Senior and Senior Plus Checking accounts. For all "eligible account types" with reoccurring direct deposit transactions an additional "$300 may be added to the overdraft (negative) balance allowance". Our normal bank fees and charges, including without limitation our non-sufficient funds/overdraft fees (currently $30 per item) as set forth in our fee schedules will be included in these limits and will be charged for each transaction presented for payment against non-sufficient funds creating an overdrawn balance of more than $10. We will charge our normal fee whether we approve the item for payment or not, however, we will not charge for more than four (4) items either as overdraft or non-sufficient funds for any one account on any one banking day..

We may refuse to pay an overdraft for you at any time, even though your account is in good standing and even though we may have previously paid overdrafts for you. You will be notified by mail of any non-sufficient funds items paid or returned that you may have; however, we have no obligation to notify you before we pay or return any item. The amount of any overdrafts including our fees that you owe us shall be due and payable immediately. If there is an overdraft paid by us on an account with more than one (1) owner on the signature card, each owner, and agent if applicable, drawing/presenting the item creating the overdraft, shall be jointly and severally liable for such overdrafts including fees.

Ineligible Accounts and Limitations: Available only for eligible checking accounts that are maintained in good standing as defined above. Savings Accounts, Money Management Accounts, Public Fund/Charitable Organization Accounts, Certain Trust Accounts, accounts used primarliy for commerical purposes, and any Minor Accounts not of legal age are not eligible for this service. We may, at our sole option and discretion, limit the number of your accounts eligible for the Overdraft Privilege Service to one account per household and/or one account per taxpayer identification number.

Eligible Account Types: The account types that are eligible for the Overdraft Privilege Service are: Convenience Checking, Premier Checking, Interest Checking, Senior Checking and Senior Plus Checking.

Eligible Account Transaction Types: NSF transactions initiated for payment against your checking account(s) may be approved/paid by us using, and up to, your assigned Overdraft Privilege Service Limit, including our fees. The eligible transaction types will include, without limitation: Checks, ACH, ATM**, POS**, Internet Banking or Internet Bill Payment and Transfers, and Telephone Banking Payments and Transfers.

You May Always OPT OUT: You may choose at any time to not participate in the Overdraft Privilege Service by notifying in person or by phone any customer service representative.

If You Need Help: Of course, overdrafts should not be used to pay ordinary or routine expenses and you should not rely on overdrafts as a means to cover these expenses. If at any time you feel you need help with your financial obligations please contact one of our customer service representatives at 575-234-2500.

The Senior Operations Officer of the bank is responsible for accountability of the OVERDRAFT PRIVILEGESM SERVICE.

*The Overdraft Privileges Service does not constitute an actual or implied agreement between you and Carlsbad National Bank. Nor does it constitute an actual or implied obligation of or by Carlsbad National Bank. This service represents a purely discretionary courtesy or privilege that Carlsbad National Bank may provide to you from time to time and which may be withdrawn by us at any time without prior notice or reason or cause. ** We do not authorize and pay overdrafts for ATM transactions and everyday debit card transactions unless you ask us to.


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Approved: Carlsbad National Bank - Carlsbad, NM    Date

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