Bank customers across the Bay Area use Meriwest Credit Union for their banking needs. However, there has been a significant interest recently among savvy consumers about Meriwest Credit Union’s overdraft fees.

What are Overdraft Fees?

When a bank customer utilizes a banking service called “overdraft protection” it simply means that if that customer overdraws his or her account, the bank agrees to pay the bill.

Overdraft protection is offered as an opt-in policy at Meriwest Credit Union.

Overdrawing a bank account is when there is less money in the account than the checks written or point of sale transactions that occur. Essentially, a customer uses more money than he or she has.

Traditionally, financial instutitions would refuse to honor transactions that would overdraw an account. Today, however, banks and credit unions offer a service available to customers in which they agree to pay the transaction. Both types of institutions typically charge the customer a fee for each such transaction, while expecting the customer to return the account to good standing as soon as possible.

At Meriwest Credit Union, there is a $35 fee for each transaction the bank pays that would overdraw a customer’s bank account. This is charged for each and every transaction that is posted to the account after the bank account’s balance has already dropped to zero or below.

Essentially, a customer could end up being charged over a hundred dollars for just a few small bank transactions that inadvertently overdrew the bank account in question.

Meriwest Credit Union Overdraft Policies

In the recent past, some banks and credit unions have been accused of reordering the posting of transactions to serve their own purposes. What this means is that, instead of posting the transactions in the order that they are received, a bank or credit union might post transactions based on the amount of the transaction.

The reason that this may be unfair to customers is that some banks have made a practice of posting the largest transactions first, which can overdraw the account sooner, creating a greater number of overdraft fees for customers.

Courtesy Pay is the name for Meriwest’s overdraft protection policy. According to the brochure for for Meriwest Credit Union’s Courtesy Pay Overdraft Privilege, they state, “Transactions may not be processed in the order in which they occurred; therefore the order in which transactions are received and processed may impact the total amount of fees incurred.”

It goes on to say that, “The order of item payment may create multiple overdrafts during a single banking day for which you will be charged our Paid NSF Fee of $35 for each overdraft item paid.”

In the Courtesy Pay brochure and in other places on the Meriwest Credit Union website, the credit union uses language underscoring the rights of the credit union to post transactions in any order they see fit.

The Courtesy Pay Brochure says, “We reserve the right to determine the timing and order in which such transactions are posted to your account to the extent permitted by law,” and elsewhere it says, “Except to the extent limited by applicable law, we have the right to change any of the factors described in (i), (ii), (iii) and (iv) listed above at any time without notice to you.”

Critics say that at best the transaction posting policy of Meriwest Credit Union is confusing and at worst, the credit union may not have the best interest of customers in mind.

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