3 AAC 03.165. Share drafts

(a) A credit union may establish share draft accounts if

(1) a summary of the policies and procedures for the accounts is available at the credit union's principal office;

(2) for a program which incorporates truncation of the instruments, the original instruments are maintained on file for at least five years unless other satisfactory means of retrieval of copies of those instruments has been established;

(3) the account holder gives, in writing, at least 15 days before the day of withdrawal, a notice of intent to withdraw money in the account, except that the board of directors may waive or reinstitute this provision at any time;

(4) surety bond coverage is in force; and

(5) those participating in the share draft program receive information which outlines the account holder's and credit union's responsibilities.

(b) The board of directors may provide for

(1) fees for share draft account usage, which may include stop payment orders, overdrafts, failure to maintain required balances, and costs required to maintain the account;

(2) participation in guarantee arrangements, if the guarantee to make payment will not place the holder of a share draft account in a preferential position if notice is imposed under (a)(3) of this section. Instruments drawn or other orders authorized before the effective date of notice may be paid in accordance with normal operational procedures; and

(3) an experimental share draft program with terms and conditions that restrict the number of share draft accounts for a period not to exceed one year, except that the dividend rate for those share draft accounts may not exceed the rate paid on regular share accounts.

History: Eff. 1/21/81, Register 77

Authority: AS 06.01.020

AS 06.45.010

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