IMPORTANT NOTICE OF CHANGE TO THE ACCOUNT AGREEMENT, ELECTRONIC FUNDS TRANSFERS AGREEMENT AND DISCLOSURES, ATM CARD AND CHECKMATE DEBIT CARD ELECTRONIC FUND TRANSFERS AGREEMENT AND DISCLOSURES AND FUNDS AVAILABILITY POLICY

Effective February 15, 2019 (the "Effective Date"), H-E-B Federal Credit Union is amending the terms of the the Account Agreement, the Electronic Fund Transfers Agreement and Disclosures (“EFT Agreement”), the ATM Card and CheckMate Debit Card Electronic Fund Transfers Agreement and Disclosures (“Card Agreement”), and the Funds Availability Policy. The changes are set forth below. We encourage you to review this notice and retain it with your Credit Union records for future reference. You may obtain a full copy of the updated agreements and disclosures by contacting us.

CHANGES TO THE ACCOUNT AGREEMENT

Powers of Attorney. Paragraph 2 of the Account Ownership section is updated to delete the restriction on power of attorney agents making a joint account survivorship designation on behalf of the principal. However, any power of attorney authorizing such action must specifically authorize the agent to make a survivorship designation. In addition, Paragraph 11 of the General Provisions section is revised to delete the current power of attorney provisions and provide that we may decline to accept any power of attorney where permitted by applicable law. Further, even if we accept a power of attorney for a member’s file or for a particular transaction, that does not mean that we will accept it for a future transaction. We reserve the right to refuse a power of attorney at any time and for any transaction where permitted by applicable law, even if the requested transaction is expressly within the scope of the agent’s powers. If we accept a power of attorney, we may continue to honor it until we receive written notification of its revocation from a competent authority and have had a reasonable time to act on it. We may inform any Joint Owners of the use of a power of attorney on your behalf.

Payment Order of Items. Paragraph 1 of the Checks and Withdrawals section is amended to provide that we may honor items and allow withdrawals in any order we chose in our sole discretion in the event your Account has an insufficient available balance to cover all checks and other withdrawal orders presented during any given business day. The changes below to the Overdrafts and Overdraft Protection terms explain what the “available balance” means in relation to the actual balance of your Account.

Overdrafts and Overdraft Protection. Paragraph 3 of the Checks and Withdrawals section is deleted in its entirety and replaced with the following:

“3. Overdrafts and Overdraft Protection.

a. What is an Overdraft? An overdraft occurs when a check, electronic Automated Clearing House (ACH), ATM or debit card, or other payment or transaction you have made is presented to the Credit Union for settlement, but sufficient funds are not available in your checking or other payment Account (collectively, “Checking Account”) to pay the transaction. In such a case, the payment would normally be returned to the payee or denied for insufficient funds, and you may be charged a non-sufficient funds (NSF) fee. With our overdraft protection services, however, the transaction can be paid using available funds from another share or loan account of yours or, if you have qualified, with our discretionary Courtesy Pay service. You may incur fees for using the overdraft protection services, so you should always take care to avoid creating any overdraft. The following terms explain how our overdraft protection services work.

b. Overdraft Protection Services. We offer two levels of overdraft protection. The first level is called Overdraft Transfers. This service transfers available funds from your designated savings or line of credit account to pay a transaction when your Checking Account does not have sufficient available funds. We determine whether sufficient funds are available when the transaction is presented to us for settlement. We will charge an Overdraft Transfer fee as set forth in the Fee Schedule for this service. This fee is less than the fee for the Courtesy Pay service described below. To use this service, you must enroll and designate the priority of your Overdraft Transfer sources on the Application or other form we have designated. The second level of overdraft protection is called Courtesy Pay. This service is automatically extended to qualifying members. Courtesy Pay is provided pursuant to our Discretionary Courtesy Pay Policy as a non-contractual courtesy. It is not a line of credit and it is never guaranteed, even if we have paid transactions for you in the past. However, in the event you write a check or initiate an ACH, online bill payment, or recurring debit card transaction and sufficient funds are not available in your Checking Account to pay the transaction, and if there are no other sources of overdraft protection available, we will strive to pay your reasonable overdrafts up to your limit if your Account is in good standing and you continue to meet eligibility requirements. We will charge an Insufficient Funds Courtesy Pay fee as set forth in the Fee Schedule when paying a transaction with this service. The amount of Courtesy Pay privilege approved for your Checking Account may vary and is subject to change at any time based on certain membership factors such as age of the Account, deposit activity and history, and overdraft activity and history, including repayment history. If you no longer wish to participate in an overdraft protection service, you may opt-out of any level at any time by calling or writing to us. Please refer to our Discretionary Courtesy Pay Policy for eligibility requirements and additional information about the Courtesy Pay service.

c. Actual and Available Balances. In order to accurately manage your Checking or other payment Account and avoid overdrafts and resulting fees, it is important to understand that your Account has two kinds of balances: the “actual balance” and the “available balance.” Funds used to pay transactions may be limited based on the available balance. We use the available balance to determine if your Account will be overdrawn. You can check the amount of your actual balance and your available balance when you review your Account online, at most ATMs, by calling us, or at a Credit Union or shared branch office. You must be enrolled in our electronic fund transfer services in order to check your balance through those systems.

The actual balance of your Account is the actual amount of money that is in your Account at any given time. The actual balance reflects transactions that have been posted to your Account. It does not reflect transactions that have been performed but are pending being posted to your Account. For example, if you have $50 in your Account and you write a check for $40, then your actual balance remains at $50 until the check is posted to the Account. The actual balance does not reflect the pending check while it is in transit to be settled with us. The actual balance also does not reflect other items that have not yet been posted to your Account, such as a remotely deposited check that has been submitted for deposit and is under review for acceptance.

The available balance is that part of the actual balance that is available for you to use without incurring Overdraft Transfer or Courtesy Pay fees. The available balance takes into account holds placed on Account funds such as check deposit holds under our Funds Availability Policy, holds for pending debit card transactions that have been preauthorized but not yet posted, and legal holds. For example, if you have $50 in your Account and you use your debit card at a restaurant for $20, then the restaurant may ask us to preauthorize the payment. When that happens, we will place a hold on your Account for $20 and your available balance will be $30, even though your actual balance will remain at $50 until the transaction posts or the hold is released. Funds subject to a hold are not available to pay checks, debit card, online bill payments, ACH, and other transactions. Please refer to the Electronic Fund Transfers Agreement and Disclosures for more information about debit card preauthorization holds. You should also keep in mind that the available balance may not always reflect all outstanding pending payments such as checks that you have written that are in transit. Additionally, the available balance may not always reflect outstanding debit card transactions. For example, if a merchant obtains a preauthorization hold but does not submit a one-time debit card transaction for payment within five business days of the preauthorization, we must release the hold. In such a case, the available balance will not reflect the outstanding transaction until we receive it and post it to the Account. Because of these circumstances, you must carefully track of all of your transactions to ensure you have sufficient funds available in your Checking or other payment Account when the transactions are presented to us. Failure to do so may cause you to incur overdraft fees.

d. Payment Order of Transactions. The order in which we process checks and other withdrawal orders (collectively, “items”) may also affect the total amount of overdraft and other fees that may be charged to your Account. Items may not be processed in the order made. While we may choose to process items in any order we choose, subject to applicable law, our general policy is to pay items as we receive them. We typically receive items to be processed against your Accounts multiple times per day in what are referred to as presentment files. Each presentment file received contains a large amount of a specific type of item (for example, checks, ACH, or ATM/Point of Sale (POS)). These presentment files may contain multiple items to be processed against your Account. In those cases where multiple items are received at the same time, the items will generally be paid as follows, subject to our reservation of right to pay checks and other withdrawal orders payable to the Credit Union first, as set forth in the Payment Authorization section of this Agreement: Checks are paid in order of the dollar amount, from lowest to highest. We will post credits from ACH files first, then debits by dollar amount, from lowest to highest. ATM/POS items are paid in the order they are presented. Transactions performed in person, such as withdrawals or checks cashed at our branch offices, are generally paid when they are performed. Our payment policy may cause your larger items not to be paid first (such as your rent or mortgage payment), but this payment order may reduce the amount of overdraft and other fees you have to pay if sufficient funds are not available to pay all of your items. Please refer to the Payment Authorization section for additional terms for the payment order of items.

e. General. You agree to maintain sufficient available funds in your Accounts at all times to pay any withdrawal order (whether oral, written, or otherwise) or item presented for payment against the applicable Account. We are under no obligation to pay any order or item (i) the amount of which exceeds the available balance in the Account upon which the order was made or the item was drawn, or (ii) that would exceed limitations imposed upon the applicable Account under our policies and procedures or under applicable law, including Federal Reserve Board Regulation D. In the event that we do pay any such order or item, we will not waive our right to dishonor any subsequent orders or items presented. If we do pay an order or item, the amount of which exceeds the available balance in the Account upon which it is drawn, or if any item deposited to your Account is subsequently returned and charged back to your Account creating an overdraft, you agree to pay us immediately the amount by which that Account is overdrawn together with any fees that we might assess. You also authorize us to deduct any overdraft from your next deposit (including a direct deposit of social security or other government benefits), to withhold or to transfer funds from any other account to which you are a party in amounts sufficient to cover any overdraft and resulting overdraft fees, or to use any other collection remedy available to us by law.

In the event that you write a check or take any other action that would result in an Account becoming overdrawn, and if you have requested and been approved for an Overdraft Transfers service, such check or action taken shall be deemed to be a request by you to us to transfer available funds from your designated Account (subject to transaction limitations) or to make an advance under your line of credit account with us, in increments that we deem sufficient to pay such check or otherwise remedy the overdraft, together with any service charge we may impose. We will use our best efforts to transfer funds from your designated Account to your Checking Account, or to make an advance under your line of credit account with us, in the manner in which you have directed in your Application. A fee may be charged for an Overdraft Transfer as set forth in the Fee Schedule. If sufficient funds are not available, then any such item presented may be returned to the payee due to insufficient funds and a charge will be made to your Account in such amounts as we may establish from time to time or we may consider paying the Item under our discretionary Courtesy Pay Policy, subject to your eligibility and the Overdraft Privilege Fee as set forth in the Fee Schedule. In some cases, such as a preauthorized debit card transaction we have committed to pay at the time of purchase, we may be required to pay the transaction if sufficient funds are not available at the time of presentment, even if you are not eligible for or have not opted into Courtesy Pay for everyday debit card transactions, but in such a case we will not charge a Courtesy Pay Fee unless permitted by law. Each party to any of your Accounts will be jointly and severally liable for overdrafts caused by any other party to the Account. In the event the Credit Union reasonably believes that the use of your Account(s) is abusive due to excessive checks or transactions presented on insufficient funds, excessive activity, or otherwise, we may limit or terminate certain services or your Account may be closed.”

Wire Transfers, Automated Clearing House (ACH), and Other Payment Order Transactions. The Security Procedures terms of Paragraph 6 of the Checks and Withdrawals section is amended to provide that, if you request a wire transfer, ACH, or other payment order transaction, you acknowledge and agree that our security procedures are commercially reasonable in light of your particular circumstances, and you authorize us to execute those procedures in order to carry out your request.

Illegal Transactions. Paragraph 5 of the General Provisions section is amended to provide that a business or organization account agrees to cooperate with us and provide any documentation we may reasonably require in order to substantiate any certification provided to us by the business or organization or to maintain the Account.

Dispute Resolution. Paragraph 9 of the General Provisions section is amended to provide that the Credit Union may impose withdrawal or other transaction limitations on your Account at any time, including your ability to access your Accounts electronically or otherwise, if you are in default under any obligation you owe to the Credit Union.

Withdrawal of Services. Paragraph 12(a) of the General Provisions section is amended to add default on an obligation to the Credit Union as an event in which services may be withdrawn under that paragraph, including without limitation, the right to maintain Accounts (except a primary Savings Account) and availability of electronic fund transfer services. In some circumstances, services may be reinstated if any default is subsequently cured.

Communications. Paragraph 27 of the General Provisions section is deleted in its entirety and replaced with the following:

“27. Communications. To ensure quality service, telephone calls and other communications between you and us may be monitored and recorded. Additionally, if you provide a telephone number or an email address to us, you represent and warrant that you are the subscriber, customary user, or owner of any such telephone number or email address. When you provide your telephone number (including cell phone) and/or email address, you authorize us and/or our service providers to contact you through those means to service your Accounts and provide general information, even if any telephone number you have provided may be on a state or federal do-not-call registry or similar list. We may contact you by voice, text messaging, or email. Message and data rates may apply. Some of our systems may use an automated dialer or prerecorded voice to deliver messages. If you provide your email address, you agree that we may send email messages concerning member benefits available to you. You must notify us promptly if any telephone number or email address you have provided changes or if you transfer your telephone number to another person or release it to your phone company, and you agree to hold us harmless if you fail to do so.”

CHANGES TO THE EFT AGREEMENT AND CARD AGREEMENT

The Overdrafts sections of the Agreements are deleted and replaced with the following:

Overdrafts. You agree not to make any withdrawal or transfer from any of your Accounts through the use of your Card, a Personal Identification Number, Password, or Touch ID (individually and collectively referred to in this Agreement and Disclosures as a “PIN”), or otherwise that results in an overdraft. Subject to any Overdraft Transfer arrangements you have made with us, you agree that we will be under no obligation to make a withdrawal or transfer if there are insufficient available funds in your Account. The term “available funds” means funds that are not subject to any holds and are immediately available for withdrawal and to pay presented transactions. Refer to the Overdrafts and Overdraft Protection provisions of the Account Agreement for more information about overdrafts and available funds. If your Account has sufficient available funds to cover one or more but not all checks, withdrawal orders, or electronic fund transfers during any given business day, we may honor those items, allow those withdrawals, or make any such electronic fund transfers in any order that we choose in our sole discretion, including first honoring any such checks, orders, or transfers payable to us, and dishonoring or refusing any item, order, or transfer for which there are insufficient available funds available thereafter. You also agree that, at our option, we may post all Card transactions during any day before posting any other checks, withdrawal orders, or other electronic fund transfers presented or made. You agree that your use of the Card and/or a PIN shall be subject to the Overdraft and Overdraft Protection provisions set forth in the Account Agreement and any other overdraft protection agreements, policies, or disclosures you may have with us.

The Suspension or Termination of Services sections of the Agreements are amended to add default on an obligation to us as an event in which we may suspend or terminate services, including electronic fund transfers services such as NetBranch Home Banking and ATM Card and CheckMate Debit Card services.

The MasterCard CheckMate Debit Card Preauthorization Holds sections of the Agreements are amended to provide that preauthorization holds may be placed on your Account for up to five business days and to remind you to practice vigilant Account management in order to avoid overdraft fees.

CHANGES TO THE FUNDS AVAILABILITY POLICY

The first paragraph of the Funds Availability Policy is amended to provide that, pursuant to the Remote Deposit Capture Agreement, remote deposits made through the NetBranch Online Banking service may not receive funds availability in accordance with the Funds Availability Policy.

By using your Accounts or services on or after the Effective Date, or by continuing your Account, you agree to accept these changes. Except as provided herein, all other terms of your agreements with us remain in effect. Please contact us at (210) 938-7850 if you should have any questions. We appreciate the opportunity to serve you.