Disclosures

ACCOUNT AGREEMENT AND DISCLOSURES APPLICABLE TO ALL CREDIT UNION ACCOUNTS

Your application for membership indicates your agreement to conform to our Bylaws and the terms and conditions of the Account Agreement. You also authorize us to verify your employment and obtain periodic credit reports for legitimate business purposes such as preapproval of a loan. You also authorize us to provide information about your accounts with us to credit reporting agencies and other parties authorized by you. The words you, your, or yours are used in this Agreement to refer to the member and anyone authorized to use the account (e.g., a joint owner). The words we, our, ours, us and Credit Union, are used herein to refer to Family 1 Federal Credit Union.

Membership Requirements: The par value of a share is $50. To maintain active membership and receive member benefits, you must keep at least the value of one share in a Prime Share account. Any member causing a loss to the Credit Union becomes ineligible for membership services.

Change of Terms: We may modify the terms of this disclosure and agreement by delivering written notice to you at least 30 days prior to any modification adversely affecting your account, unless the change is required to preserve account security or covered by Regulation E or other law permitting a shorter notice period. Variable rate accounts are subject to changes as disclosed.

Nature of Dividends: Dividends are paid from current income and available earnings after required transfers to reserves at the end of a dividend period. Dividends are declared by our Board of Directors based on available earnings at the end of each dividend period.

Balance Computation Method: Dividends are calculated by using the average daily balance method that applies a periodic rate to the average daily balance in your account for the dividend period.

Accrual of Dividends: Dividends begin to accrue on the business day you deposit cash and non-cash items (e.g., checks) to your account if deposited before the close of business. However, where deposits are made at non-proprietary ATMs, dividends will begin to accrue upon verification of the deposit, usually 3 business days.

Lien on Shares: We retain a lien on any and all of your present or future shares, share draft or share certificate accounts. Should you default in any of your obligations to us, for any reason, we may, without notice, debit any of your accounts an amount sufficient to satisfy your obligations. We may apply the shares in any manner we wish to your outstanding financial obligations.

Bonuses: A separate disclosure will be provided for any bonus.

National Credit Union Share Insurance Fund: Member accounts in this Credit Union are federally insured by the National Credit Union Share Insurance Fund.

Bylaw Requirements: A member who fails to complete payment of one share within 1 month of his admission to membership or a member who reduces his share balance below the par value of one share and does not increase the balance to at least the par value of one share within 1 month of the reduction may be terminated from membership. Shares may be transferred only from one member to another by written instrument in such form as the Credit Union may prescribe. The Credit Union reserves the right, at any time, to require members to give, in writing, not more than 60 days notice of intention to withdraw the whole or any part of the amounts so paid in by them. Shares paid in under an accumulated payroll deduction plan may not be withdrawn until credited to a members account. No member may withdraw shareholdings that are pledged as required security on loans without the written approval of a loan officer, except to the extent that such shares exceed the members total primary and contingent liability to the Credit Union. No member may withdraw any shareholdings below the amount of his primary or contingent liability to the Credit Union if he is delinquent as a borrower, or if borrowers for whom he is a comaker, endorser or guarantor are delinquent, without a loan officer’s written permission.

Special Rules: Shares are not transferable except on our records. We may endorse checks for the account owner(s) that we receive for investment in such account. You must keep us informed of your current address. Account statements will be mailed only to the address shown on Credit Union records. We reserve the right to close any account. All cash transactions are final. If you need cash in an amount greater than $1,000, we may need a 7-day advance notice. We are required by the Bank Secrecy Act to file reports with the U.S. Treasury and follow specific member identification procedures in cases of large currency transactions. If accepted, postdated checks will be treated as if they were written and dated on the date received. We are under no obligation to pay a check which is postdated or more than six months old.

You agree that we are authorized to receive and accept as original any document, transacting any and all business with you, with or without our signatures in a facsimile format. You agree to waive any rights you may have should we accept and act upon a document sent by facsimile. Further, you agree to indemnify and hold you harmless from any and all claims, costs or damages of any nature should you accept and use a document of ours sent by facsimile.

Fees: All fees and charges that may be deducted from your account are disclosed on the Fee Schedule.

Transaction Limitations (Not Applicable to Checking Accounts): During any calendar month, you may not make more than 6 withdrawals or transfers by means of a preauthorized or automatic transfer or telephonic order of instruction. If you exceed these transfer limitations in any statement period, your account will be subject to closure by the Credit Union.

Deposit Requirements: You must have a Prime Share Account with a minimum of $50 on deposit in order to open any other account. If the Prime Share Account falls below the minimum requirement, your Prime Share and all sub accounts will be subject to closure by the Credit Union.

Cashiers and Tellers Checks: Cashiers and Tellers checks are drawn on our account and are therefore subject to special requirements under state law. In the event you have a dispute with your payee (the person to whom you’ve had the check made payable) about the product or service you are purchasing with this check, we cannot stop payment on the check. Therefore, before giving the check to your payee, please insure that you are satisfied with the product or service. In the event the check is lost, stolen or destroyed after being in your possession, you may file a claim with us and by state law must wait 91 days from the date of the check to be reimbursed. Alternatively, you may sign an affidavit that the check is lost, stolen or destroyed, but may be required to post a bond before being reimbursed.

Periodic Statements: Statements will be mailed to you quarterly unless you have a checking account, in which case, you will receive monthly statements. You may also view your account activity online by using Mr. OnLine or SpeedCU or through our Internet statement service, eStatements.
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JOINT ACCOUNT (MULTIPLE PARTY) AGREEMENT
Any joint owner appearing on the Savings Account Signature Card and acting alone has the right to access funds in any sub account of the Prime Share Account (except IRA, other tax deferred accounts, or for which a separate signature card agreement indicating a different ownership may exist). The terms of the Savings Account Signature Card govern all sub accounts for the associated Prime Share Account, including, but not limited to, the certification of Tax Identification Number, beneficiary(ies), and the terms of a joint account with Right of Survivorship.

We may pay out funds or transact business pertaining to any account with the signature of any one of the account owners or the signature of any designated agent(s). In the event of conflicting demands for funds in any account, we may require the signatures of all joint owners. No joint owner may be removed from an account without the written authorization of all joint owners. Payment of any shares to a joint owner by us shall be valid and discharge us from any liability for such payment. Any joint owner may pledge all or any part of the shares in the account as collateral security to a loan or loans.

All joint owners are jointly and severally liable for repayment of the full amount of any overdrawn account balance, without regard to which owner may have caused the overdrawn balance and/or benefited from the proceeds of the overdraft or withdrawal. Shares may be taken from any share account from which any owner is entitled to withdraw to satisfy a negative balance in a Prime Share or sub account.

All sums added to a share account, and all dividends paid or credited thereon, will be held by the member or joint owner(s) in trust for any named beneficiary(ies), subject to the right of the joint owners, or any one of them, to revoke the same in whole or in part by and to the extent of the withdrawal of sums from the account.

Upon the death of the member (if no joint owner), or upon the death of the last surviving joint owner, the balance remaining in the account will be distributed by us to the beneficiary or, if there is more than one beneficiary, to the beneficiaries then living in equal shares. If there are no beneficiaries surviving, the balance remaining in the account will be distributed to the estate of the person whose death terminates the account.
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PRIME SHARE ACCOUNT
Rate Information: The dividend rate and annual percentage yield (APY) may change every dividend period as determined by the Credit Union Board of Directors. Current dividend rates and APYs are available on the current Fee Schedule.

Compounding & Crediting: Dividends will be compounded monthly and credited monthly. For this account type, the dividend period is monthly. For example, the beginning date of the first dividend period of the calendar year is January 1 and the ending date of such dividend period is January 31. All other dividend periods follow this same pattern of dates. The dividend declaration date is the last day of the dividend period, and for the example is January 31. If you close your share account before dividends are credited, you will not receive accrued dividends.

Minimum Balance Requirement: The minimum balance required to open this account is $50, representing the purchase of one share in the Credit Union.
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SHARE ACCOUNT
Rate Information: See Prime Share Account Disclosure.

Compounding & Crediting: See Prime Share Account Disclosure.

Minimum Balance Requirements: The minimum balance required to open this account is $5 and you must maintain this minimum to avoid closure and transfer of funds to your Prime Share Account.

HOLIDAY CLUB ACCOUNT
Rate Information: See Prime Share Account Disclosure.

Compounding & Crediting: Dividends will be credited annually on October 31. For this account type, the dividend period is annual. For example, the beginning date of the dividend period is November 1 and the ending date of such dividend period is October 31 of the following year. If you close your Holiday Club Account before dividends are credited, you will not receive accrued dividends.

Minimum Balance Requirements: There is no minimum balance requirement to open this account.

Transaction Limitations: This account will be closed and any remaining balance will be transferred to your Prime Share account if you withdraw from this account. In such instance, this account may not be reopened until the beginning of the next dividend period.

Distributions: After dividends are paid, the balance of this account will be transferred to your Checking account or, if you do not have a Checking account, to your Prime Share account.
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MONEY MARKET ACCOUNT
Rate Information: See Prime Share Account Disclosure.

Compounding & Crediting: See Prime Share Account Disclosure.

Minimum Balance Requirements: The minimum balance required to open a Money Market Account and obtain the disclosed APY is $2,500. If the balance falls below the minimum opening balance, the Credit Union will close the account and transfer the remaining funds to your Prime Share Account.

Transaction Limitations: Three withdrawals or transfers may be made without charge per calendar month; thereafter a $10/transaction fee will be charged.
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SHORT TERM PARKING ACCOUNT
Rate Information: See Prime Share Account Disclosure.

Compounding & Crediting: See Prime Share Account Disclosure.

Minimum Balance Requirements: The minimum balance required to open a Short Term Parking Account and obtain the disclosed APY is $10,000. If the balance falls below the minimum opening balance, the Credit Union will close the account and transfer the remaining funds to your Prime Share Account.

Transaction Limitations: Three withdrawals or transfers may be made without charge per calendar month; thereafter a $10/transaction fee will be charged.
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CHECKING ACCOUNT
Rate Information: See Prime Share Account Disclosure.

Compounding & Crediting: See Prime Share Account Disclosure.

Deposit Requirement: You must be a member in good standing (i.e., no delinquent loans).

Account Closure: Your checking account may be closed for excessive incidents of returned items, returned deposits or other reasons deemed appropriate by the Credit Union in its sole discretion. Your checking account may be closed if you are not a member in good standing with us. Checking accounts closed by us may only be reopened with the consent of the President or the President’s designee.

Dormant Accounts: If your checking account becomes inactive for a period in excess of 90 days, 1) we may close the account and transfer funds to your Prime Share Account, 2) we may require you to maintain a minimum balance, or 3) we may impose fees in connection with the maintenance of your account.

Waiver of Rights: You waive any objection respecting any item shown on a Checking Account statement, including forged or altered checks, unless the Credit Union receives written objection within thirty-one days from the statement mailing date.

Account Conditions: Except as may be required by any overdraft protection plan or Check Guarantee plan requested and granted, we are under no obligation to pay a check that exceeds the balance in the Checking Account. We may, however, pay such a check and charge the amount of the resulting overdraft plus a service charge as stated on the Fee Schedule against any other share account from which the person who signed the check is entitled to withdraw shares. You authorize us to pay checks signed by any one of the account owners as designated on your Checking Account Agreement card. Only check blanks and other methods approved by us may be used to withdraw funds from Checking Accounts. Except for negligence, we are not liable for any action taken regarding the payment or nonpayment of a check.

Overdrafts: The overdraft transfer clause in your Checking Agreement permits a maximum of 6 preauthorized transfers from each overdraft share type designated by you to your Checking Account each month. Preauthorized transfers include transfers made by telephone, SpeedCU (our audio response unit), or by automatic overdraft transfer. Unlimited overdraft loan transfers may occur each month. Overdraft loan transfers will be made in $50 increments, up to the balance of your credit line. Overdraft transfers from shares will be made for the exact amount necessary, subject to the limits on such transfers imposed by Federal Reserve Board Regulation D.

Stop Payment Requests: You may request a stop payment order on any draft drawn on your account. You must represent and warrant that you have no information or belief that any holder of the subject check has attempted, or will attempt, to effect payment of it by electronic presentment, re-presentment or return procedures through an Automated Clearing House (ACH). Should any holder of the check attempt to obtain payment through ACH, we are unable to, and under no obligation to stop such payment. Should any holder of the check actually obtain payment through ACH, our sole obligation to you will be to use its reasonable efforts, with your full cooperation, to obtain a return of the payment, but without warranty.

To be binding, an order must be dated, signed, and describe the account and draft number and the exact amount. Subject to the conditions above, the stop payment will be effective if we receive the order in time for us 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 computer 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.

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 attorneys fees, damages or claims related to our refusing payment of an item, including claims of any multiple party account owner, payee, or endorser in failing to stop payment of an item as a result of incorrect information provided by you.

Fees for stop payment orders are set forth on the Fee Schedule: A 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.
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SHARE CERTIFICATE ACCOUNT
Rate Information: Share Certificate Accounts are fixed rate accounts. The dividend rate and APY will not change for the term of the Certificate. The disclosed APY is based on the assumption that dividends will remain on deposit until maturity. Dividends will be paid to the certificate or an alternate account at the members option.

Compounding & Crediting: See Prime Share Account Disclosure.

Minimum Balance Requirements: Minimum balance requirements are disclosed on the current Fee Schedule.

Transaction Limitations: You may not make additional deposits into the certificate until the maturity date of the certificate.

Maturity Date: Your account will mature on the date shown on your account statement.

Early Withdrawal Penalties: Revocation of a certificate within the first 7 days immediately following any renewal date shall receive dividends at the rate then applicable, without penalty. Except as expressly provided below, any partial or full withdrawal of the principal amount prior to expiration of the term will result in a penalty. Withdrawals that reduce the principal to less than the stated minimum will result in cancellation of the entire Share Certificate Account as well as a penalty. The penalties will be:

• For an account with a term of less than 1 year, the penalty will be equal to the amount of dividends that would have been earned over a 90-day period on the amount of principal withdrawn.

• For an account with a term of more than 1 year, the penalty will be equal to the amount of dividends that would have been earned over a 180-day period on the amount of principal withdrawn.

Penalties may be waived in the event of death or legal incompetence of any owner or withdrawals made because of the voluntary or involuntary liquidation of the Credit Union.

Renewal: Share Certificate Accounts automatically renew at maturity for the same time period as the original term unless you prevent renewal by withdrawing all of the funds in your account at maturity or within a grace period of 7 days after maturity. We can prevent renewal if we mail required notice to you before maturity. If, when you receive notice of nonrenewal, you do not withdraw all of the funds in your account on the maturity date, your funds will be transferred to your Prime Share Account.
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ACCUMULATION IRA
Rate Information: See Prime Share Account disclosure.

Compounding & Crediting: Dividends will be compounded quarterly and credited quarterly. For this account type, the dividend period is quarterly, for example, the beginning date of the first dividend period of the calendar year is January 1 and the ending date of such dividend period is March 31. All other dividend periods follow this same pattern of dates. The dividend declaration date is the last day of the dividend period, and for the example is March 31. If you close your Accumulation IRA before dividends are credited, you will not receive accrued dividends.

Minimum Balance Requirement: This account has a minimum balance of $250. You have 6 months from the date of opening your Accumulation IRA to increase your balance to $250 to avoid closure. If the balance falls below $250 following the initial 6 months period, the account will be closed and the funds mailed to your address of record.

Transaction Limitations: The transaction limitations applicable to this account are governed by Internal Revenue Service Rules. Additional contributions of $10 or more may be made to Accumulation IRAs. Any contributions received for less will be credited to the member’s Prime Share Account.

Distributions: Regular IRA distributions are available only from Accumulation IRAs and they are processed on the first of each month. No regular distribution will be made for less than $250. A fee may be charged for regular distribution as disclosed on the Fee Schedule.
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IRA CERTIFICATE ACCOUNT
Rate Information: IRA Certificate Accounts are fixed rate accounts. The dividend rate and APY will not change for the term of the Certificate. The disclosed APY is based on the assumption that dividends will remain on deposit until maturity. Dividends will be paid to the certificate.

Compounding & Crediting: See Prime Share Account Disclosure.

Minimum Balance Requirement: Minimum balance requirements are disclosed on the current Fee Schedule.

Maturity Date: Your account will mature on the date shown on your account statement.

Early Withdrawal Penalties: See Share Certificate Account Disclosure.

Renewal: IRA Certificate Accounts automatically renew at maturity for the same time period as the original term unless you prevent renewal by withdrawing all of the funds in your account at maturity or within a grace period of 7 days after maturity. We can prevent renewal if we mail required notice to you before maturity. If, when you receive notice of nonrenewal, you do not withdraw all of the finds in your account on the maturity date, your funds will be transferred to your Accumulation IRA.

Distribution: Regular distributions will not be made from IRA Certificates.

SPECIAL IRA RULES
IRAs may not be assigned, pledged, or transferred. All other terms and disclosures for IRAs are contained in the appropriate IRA Simplifier Custodial Agreement and Disclosure (Individual, Roth, or Educational, depending on the type(s) of IRA you open), which by this reference is incorporated into this account disclosure in its entirety. When you open an Individual Retirement Account, the appropriate IRA Agreement and Disclosure will be provided. Contributions will be credited for the year in which they are received, unless express written instruction to the contrary accompanies the contribution.

PRIVACY POLICY
We maintain the confidentiality of each member’s financial records, consistent with state and federal laws. The following sets forth our policies regarding the use and protection of members’ financial information.

Collection and Use of Information: During the course of business, we collect information members provide as well as information available from public records and credit reports. We use this information about members to administer their records and accounts, to process their transactions, to assist us in developing new products and services, to aid members in learning more about our products and services and to fulfill any legal and regulatory requirements.

Accuracy of Information: Our policy is to ensure that our records contain accurate information about members. Necessary changes will be made promptly upon notification by any member of any inaccuracies in his/her statement.

Security of Information: Member information will be protected from unauthorized access using established security standards and procedures. We will continually update and assess our systems to improve our technology for protecting information.

Employee Access to Information: Employee access to member information is limited to business purposes only. Employees will access information about members when needed to administer member accounts, to provide requested services, or in response to a legally valid outside request or order (such as a subpoena). Employees may also access information to exercise F1FCU’s rights under the law or pursuant to any agreement with members.
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ESCHEAT
California law states that inactive balances must be turned over to the State (escheated) after a period of 3 years if you have not: a) increased or decreased the amount of the account or presented an appropriate record for crediting of interest or dividends; or b) corresponded electronically or in writing with us concerning the account; or c) otherwise indicated an interest in the account as evidenced by a memorandum on file with us.

FUNDS AVAILABILITY POLICY
Our policy is generally that funds will be available to you on the same business day that we receive your deposit at a branch, including funds from electronic direct deposits. At that time, you can withdraw them in cash and/or we will use them to pay checks that you have written. Longer delays may apply (see below) and this policy does not apply in the case of deposits made at ATM machines (see below) so, if you need the funds from a deposit right away, you should ask us when the funds will be available.

This policy will apply provided the deposit is received (for example, by mail) at a branch by 2:00 p.m. on a business day we are open or if you make the deposit in person to one of our employees. A business day is every day except Saturdays, Sundays and holidays. However, if you make a deposit after 2:00 p.m. or on a day we are not open, we will consider that the deposit was made on the next business day we are open.

Remember that even after we have made funds available to you, you are still responsible for checks that you deposit that are returned to us unpaid and for any other problems involving the deposit.

Policy For Longer Delays: In some cases, we will not make all of the funds that you deposit by check available to you on the first business day after the day of your deposit. Depending on the type of check that you deposit, funds may not be available until the fifth business day after the day of your deposit. However, the first $200 of your deposit will be available to you on the first business day after the day of your deposit.

If we are going to make all of the funds from your deposit available on the first business day, we will notify you at the time you make your deposit. We will also tell you when the funds will be available. 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 day after we receive your deposit.

Additionally, funds you deposit by check may be delayed for a longer period under the following circumstances:

• We believe a check you deposit may not be paid;

• You deposit checks totaling more that $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 9 business days after the day of your deposit.

Deposits to a New Account: If you are a new member, the following special rules will apply during the first 30 days your account is open.

Funds from electronic direct deposits will be available on the day we receive your deposit. Deposits of cash, wire transfers, and the first $5,000 of a day’s total deposits of, traveler’s and federal, state and local governmental checks will be available on the day we receive your deposit if the deposit meets with certain conditions. For example, the checks must be payable to you. The excess over $5,000 will not be available until the second business day after the day of your deposit. Funds from all other check deposits will be available on the fifth business day after the day of your deposit.

Holds on Other Funds: If we cash a check for you that is drawn on another financial institution, we may withhold the 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 financial institution, 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.

Deposits at Automated Teller Machines: Funds from any deposits (cash or checks) made at automated teller machines (ATMs) we do not own or operate will not be available until the fifth (5th) business day after the day of your deposit. Funds from deposits made at our automated teller machines before 2:30 p.m. on a business day that we are open will be available to you on the following business day. However, if you make a deposit after 2:30 p.m. or on a day we are not open, we will consider that the deposit was made on the next business day we are open. All ATMs that we own or operate are identified as our machines.
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Temporary NCUA Insurance Coverage for Transaction Accounts:

All funds in a “noninterest-bearing transaction account” are insured, in full, by the National Credit Union Administration through December 31, 2012. This temporary unlimited coverage is in addition to, and separate from, the coverage of at least $250,000 available to members under the NCUA’s general share insurance rules. The term “noninterest-bearing transaction account” includes a traditional share draft account (or demand deposit account) on which the insured credit union pays no interest or dividend. It does not include any transaction account that may earn interest or dividends, a negotiable order of withdrawal (“NOW”) account, money-market deposit account, and interest on Lawyers Trust Account (“IOLTA”), even if share drafts may be drawn on the account. For more information about temporary NCUA insurance coverage of transaction accounts, visit www.ncua.gov.

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