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ACH – Automated Clearing House. The system that runs direct deposit and a number of other products to move money electronically. Payroll deduction/allotment posts through ACH. The checks you write can be converted to an ACH item by the payee to allow the funds to be moved quickly and electronically. You can also use ACH to set up automatic regular payments from any financial institution to any other financial institution that will accept it.

APR - Annual Percentage Rate. The actual cost of credit expressed in a standard form, allowing you to compare rates directly.

APY – Annual Percentage Yield. The effective rate of interest you would receive on a deposit account if you left it in the account for one year. It is an expression of the quoted rate plus compounding.

Carfax – An independent vehicle history report. This report is required for used vehicles financed through the credit union. It keeps you from unknowingly purchasing a vehicle with a “rolled back” odometer or a salvaged title.

Cash Back - If you deposit a check and want to keep some of it in cash, we refer to this as "cash back".

Co-borrower - A second signature on a loan; typically a spouse.  The co-borrower has use of the funds from the loan.

Co-maker - A second signature on a loan.  The co-maker is obligated to pay the loan if you do not, but he/she receives none of the loan funds.

Courtesy Pay – A product sometimes provided to you if you accidentally write a check for more than their balance. For a fee, the credit union may clear the check anyway, giving you extra time to make a deposit to cover the negative balance.

Debit Card – A plastic card with the VISA logo with which you can pay for things using the funds in your checking account. Transactions can be processed as either “credit” (you sign for it) or “debit” (you enter your PIN). Either way, the money comes out of your checking account.

Delinquent Credit Obligations - If you do not pay your loans, charge cards, mortgage, car payment, etc. on time, you will have delinquent credit obligations.  If you subsequently "catch up" on your payment, you will still have a record of delinquency (not paying as agreed) for a period of time afterward.

Dividends - The interest you earn on the money you deposit in the credit union.

Draft - Another word for a check.  Some drafts are "sight" drafts, meaning payable upon presentation.  Your credit union share drafts are sight drafts.  Some drafts are conditional, meaning they can only be paid when some related action is taken.  The issuer of the item will pay it only when a third party bank verifies that the conditions have been met.  An example of this type of draft is an insurance check to pay off a "totaled" vehicle.  It's no good unless the car title is released to the insurance company in advance.

EFT - Electronic Funds Transfer (also known as ACH or Automated Clearing House).  Direct deposit, ATM cards, pre authorized debits, point of sale "debit cards" and some bill payer programs are examples of EFT transactions.  Funds are transferred from one place to another without the use of a paper check.

Equity - The difference between what you owe on an asset and what it's worth.  If an asset is worth more than you owe you have "equity".  If you owe more than it is worth (as in the case of a leased auto), you have no equity.  This situation is commonly referred to as being "upside down".

Family Member – For the purposes of membership eligibility, a family member is a spouse, parent, child, sibling, grand parent or grandchild of the member in the field of membership defined in the charter (including step and adoptive relationships).

Fee - A charge imposed for some special service, such as stop payment, statement copies, draft copies, trust deed loan application, etc.

FICO - Fair-Isaac Company. The entity that compiles credit data on millions of credit users. This data is then used to predict the future payment behavior of a credit applicant. The higher the score, the better. Maximum score is 850. Most lenders make rate and approval decisions based on this score.

Foreclosure - If you do not make your house payments, your lender will foreclose.  This means your house will be sold at auction and you will lose any down payment you made.  Sometimes the house cannot be sold for enough to pay off the loan and you will be left with an unpaid "deficiency balance" which will remain on your credit record.

Forfeiture - Term used to describe the loss of dividends (interest) on a certificate if you redeem it before maturity, thus having to pay a penalty for early withdrawal.

GAP Coverage – An inexpensive waiver policy that makes your loan balance “go away” if your car is totaled or stolen and not paid off by your insurance.

HELOC – Home Equity Line of Credit. An open-end loan contract permitting repeated advances and using your home as collateral.

Interest - The finance charge you pay on the loans you make with the credit union or any other financial institution.

IRA - Individual Retirement Account.  Account into which funds are deposited for use at retirement.  The IRS establishes the rules for these accounts.

Joint Tenancy - An account held by two people with right of survivorship.  Right of survivorship means the account immediately passes to the remaining owner upon the death of either owner.  Either owner of an account held in joint tenancy has the right to transact any business on the account, including close it without the other owner's knowledge.

Judgment - When one party sues another, both parties appear before a judge who decides who is right.  The winner has a judgment in his favor.  The loser has a judgment against him and must legally do what the judge says he must do.  When we ask you if you have a judgement outstanding, we mean "have you ever been sued and lost”?

Kiting - The practice of writing share drafts (checks) without funds on deposit in the account.

Loan Default - Failure to uphold any of the terms of the loan agreement.  The most common default is failure to make payments.  Failure to keep collateral insured, failure to notify the credit union of the whereabouts of the creditor or collateral, failure to keep collateral in good repair and filing bankruptcy are examples of other loan defaults.

MBP – Mechanical Breakdown Protection. Like an extended warranty, but costing much less, this coverage will pay (after a small deductible) for many car repairs (not including tires, brake pads, oil changes, wiper blades, and the like).

NCUA - Stands for the National Credit Union Administration.  This is the agency of the federal government which charters the credit union, regulates its activities, and retains the examiners who make sure the credit union is being run properly.

Overdraft - If you write a share draft (check) for more than you have on deposit, an "overdraft" is created.  In other words, the account is overdrawn.

Overdraft Protection – You can link your checking (share draft) account to a savings account (savings overdraft protection) or to a line of credit (overdraft LOC). Then the computer will look to one of these accounts for extra funds if you write a check for more than you have in your checking account.

PC Tellerline - The credit union’s Internet-based (computer) access system which allows you to check your balances and transactions and to move money between your savings, checking or loans. You can also check your Visa, order checks, log into Bill Payment and other services. (Sometimes referred to as “Net Branch.”)

Secured Loan - A loan that has some collateral backing it up.  Collateral is physical property (such as a car, balances on deposit, real estate, etc.) which can be sold or used to pay the loan if the borrower does not.  This additional "security" typically makes it easier to qualify for the loan or entitles the borrower to a lower rate of interest.

Shares - Term used for the funds you deposit in your credit union accounts.  Since you are an owner of the credit union, all funds you deposit represent your portion of ownership or "share" of the credit union. 

Share Draft - This is another word for "check".  A "share draft" account at the credit union is exactly the same as a "checking" account at the bank (except you typically earn interest on your balance on deposit in a share draft account).

Share Secured - A share secured loan is one in which an amount equal to the loan amount is held on deposit with the credit union.  This entitles you to a preferred rate and eliminates all qualification requirements.  It's a perfect loan for members who have funds they do not want to spend.  The funds on deposit continue to earn dividends while the loan is outstanding.

Signature Loan - A loan with only the signature as collateral.

Split Rate Account - Our Money Market Account is a split rate account.  This means you earn a rate of interest which depends on your balance.  A certain rate is paid on balances in a given range.  As the balance increase into the next range the rate automatically increases.

Tellerline – The credit union’s touch-tone phone access system which allows you to check your balances and transactions and to move money between your savings, checking or loans.

Trust Account - There are several types of trust accounts, but basically, they are accounts held in a special form for the benefit or protection of the member or some other party.  Depending on the type of trust, that party may or may not have access to the funds.  An account for a minor is one example.  The parent opens the account in trust.  The parent is the custodian (controller) of the funds and the child cannot withdraw from the account.  An account placed in a living trust is another example. The member continues to have access to and control of the funds, but is protected from certain taxes by the trust.

Trust Deed Loan - Mortgage loan.  Loan for which real property is the collateral.  The only difference between a first and second trust deed loan is the order in which they were processed.  If there is only one loan on the property, it is a first trust deed.  If there are two loans on the property, the first one made is the first trust deed, the second one made is the second trust deed.  If you later decide to take one big loan to combine both, it becomes, again, a first trust deed.

Wire – Another way to move funds from one account to another electronically. This is slightly different than ACH and sometimes requires different account or routing numbers than the same transaction created through ACH. This method of moving money is best for single non-repetitive transfers.
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