Deposit Account Agreement and Disclosure

Please carefully read the disclosures below.

For a printable version of these disclosures in Adobe PDF format, click here.

Privacy Policy and Disclosure

TYPES OF INFORMATION THE BANK COLLECTS

• Information we receive from you on applications or other forms.

• Information about your transactions with us and others.

• Information we receive from customer reporting agencies and other parties.

TYPES OF INFORMATION THE BANK DISCLOSES

• To companies (including our corporate parent, North Valley Bancorp) who perform

- Transaction processing and record-keeping for the Bank.
- To maintain or service your deposit or loan account.
- In connection with a securitization, secondary market sale (including servicing rights), or similar transaction.

• To collection agencies, attorneys and others we deem appropriate in connection with enforcement of the Bank’s legal or contractual rights or the rights of any other person who is engaged in the financial transaction.

• To those who we believe need the information in the ordinary course of business, such as to assist in the settlement of claims or benefits, the confirmation of information to you or your agent, and the billing, processing or clearing of items in the normal course of business.

• To insurance rating advisory organizations, guaranty funds or agencies, agencies that are rating the bank, persons who are assessing the Bank’s compliance with industry standards and the Bank’s regulators, attorneys, accountants and auditors.

• To government agencies to the extent permissible under the federal and state Right to Financial Privacy Acts.

• To consumer reporting agencies.

• To other businesses who we reasonably believe have a legitimate need for the information, such as those seeking such information in connection with an application for credit you have submitted to the requestor.

• To comply with federal, state or local laws, rules and other applicable legal requirements.

SAFEGUARDING CUSTOMER INFORMATION

At this Bank, we protect customer privacy by ensuring that only employees who have a business reason for knowing information have access to it. The Bank has appointed the Bank’s compliance officer as our financial privacy coordinator. This officer is responsible for maintaining internal procedures to ensure that our customers’ personal information is protected. For example, information in loan files can only be accessed by employees who work in the loan origination or loan operations departments.

All employees have a copy of this policy and are trained at least annually regarding the importance of safeguarding customer information. The financial privacy coordinator, the human resources director and the appropriate department manager will take appropriate disciplinary action against any employee who violates the Bank’s privacy policy and procedures.

If we change our policy or practice by, for example, adding a category of information that we will disclose to a third party, we will notify affected customers and, if required by the privacy laws, give them an appropriate time period to opt out of the disclosure. 

Deposit Contract

IMPORTANT INFORMATION ABOUT OPENING A NEW ACCOUNT

To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens an account.

What this means for you: When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you to our satisfaction. We may also ask to see your driver’s license or other identifying documents.

AUTHORIZED SIGNERS/MULTI-PARTY ACCOUNTS

There are a number of different multiparty accounts. Here is a list of the most common types. You may wish to consult your attorney for estate planning purposes before deciding which type of multiparty account, if any, you desire. 

Authorized Signers: While our signature cards for checking, savings, time or other accounts may allow you to specify that more than one signature is required to authorize payment of an item or any other form of transfer, withdrawal, or transaction, you understand and agree that this indication will not be binding on us. Rather, we may pay out funds from your account if the transaction is authorized by any one of the persons authorized to sign on the account.

If the authorized signers on your account change, we may continue to honor items and instructions given earlier by previously authorized signers unless you notify us in writing not to do so. (Note: a new signature card, by itself, does not constitute such notice).

You agree that signatures by your authorized agents are valid, even if the principal-agent relationship is not indicated on the check, item or instruction they sign.

We may act upon the instruction of any authorized person to close, partially or fully withdraw the funds in the account, renew or otherwise deal with the account, whether or not that person has possession of the checkbook, passbook or certificate evidencing the deposit.

Joint Tenancy Accounts: If you open an account with others in “joint tenancy,” each owner will have an equal undivided ownership interest in the account during his or her lifetime. If one joint tenant dies, the surviving joint tenant(s) will become the sole owners of the account.

Tenants in Common Accounts: If your account is opened with others as “tenants in common,” each of you will own some undivided interest in the account. (Note: we will assume it is an equal interest, unless you notify us in writing to the contrary.) If a tenant in common dies, his or her share does not pass to the surviving tenant(s). Instead, it goes to the estate or other legal successor of the deceased tenant. However, we will continue to permit the survivors to withdraw funds from the account after one or more of the tenants in common die. It will be up to the decedent’s estate or other legal successor to seek the decedent’s interest in the account from us to the extent we still have it, and we will not be responsible to the decedent’s estate or other legal successor for any funds that were withdrawn prior to our receipt of the estate’s or other legal successor’s claim, nor need we take any steps to assure that any owner, including the decedent’s estate or legal successor, claims only his, her or the decedent’s share of the account.

Informal Trust Accounts: If you open your account “in trust” for someone else (such as your child) but the signature card for your account does not indicate that you are acting as the trustee under a written trust agreement or other fiduciary arrangement (for example, as trustee for your clients), your account will be treated as a payable on death account. During your lifetime, you will be the exclusive and outright owner of the deposit, with full control over the account with the right to make deposits to and withdrawals from the account, and to change the beneficiary or close the account. If more than one person opens a payable on death account, their interests will be as joint tenants (see above). The amount, if any, in the account when the last of the owners who opened the account dies will pass to the beneficiary or beneficiaries in equal shares unless you have given us specific written instructions for a different division.

Formal Trust Accounts: If you open your account “in trust” and the signature card for your account indicates that you are acting as the trustee under a formal written trust agreement or that the account is held by you as trustee for your clients or under another fiduciary arrangement, your account will be treated as a trust account. You will have full control over the account subject to the terms of the trust agreement or the legal or regulatory rules applicable to the fiduciary relationship, and we will have no responsibility to monitor how the account is used or whether it is used in accordance with the trust agreement or legal or regulatory rules. When you resign as trustee or are otherwise unable to act as trustee, the successor trustee will become the owner of the account after furnishing us with appropriate documentation.

Community Property Accounts: If you and your spouse or registered domestic partner open a “community property” account, each of you will have an equal undivided interest in the account. If one of you dies, one-half of the account will belong to the survivor. Ownership over the other half will be determined by the rules applicable to the decedents’ estate. The other half may not pass automatically to the survivor, since the deceased individual’s share of the account goes to his or her estate. However, we will continue to permit the survivor to withdraw funds from the account after one of you die. It will be up to the decedent’s estate or legal successor to seek the decedent’s interest in the account from us, and we will not be responsible to the decedent’s estate or other legal successor for any funds that were withdrawn by the survivor prior to our receipt of the estate’s or other legal successor’s claim to a portion of the account. (Note: if you want a deposit to be treated as community property, this must be clearly indicated on the signature card; otherwise, a two-owner account not held as tenants in common will be considered a joint tenancy account).

Powers of Attorney: We are sometimes asked to honor instructions given by someone claiming to act on behalf of a depositor under a power of attorney. We reserve the right to refuse to act upon those instructions if we are not reasonably certain that the power of attorney is valid and covers the transaction(s) requested. Therefore, if you wish to appoint an agent to transact business with us on your behalf, we suggest that you consider using our standard Power of Attorney form, you and your agent sign the form at the Bank, and you renew your power of attorney authorization frequently. If you prefer using a non-bank form, we recommend that you personally present it to us before your agent will need to use it, so that we can examine the power and advise you whether we find it acceptable.

If you want your agent to be able to handle your affairs even if (or only if) you become legally incapacitated, you should be sure that the power of attorney form you sign is a durable power of attorney designed for that purpose. Otherwise, we will not honor even a recently signed and completely valid power of attorney once we learn or reasonably suspect that you have or may have become legally incapacitated. You should understand, however, that even if the power you have given is durable, it will not be effective with regard to accounts you hold as a fiduciary, such as a trustee under a formal trust arrangement, if you become incapacitated, nor will it permit your agent to act on your behalf with regard to a trust account you hold while you remain competent unless the power of attorney expressly specifies that it covers actions you might take in your capacity as a trustee. We strongly advise you to seek advice of a lawyer before deciding whether a durable power of attorney will meet your needs.

You understand that when we are requested to honor the instructions of one claiming to be your agent upon presentation of a power of attorney form (whether on a standard Bank form or one you or your attorney prepare) we will have to consider the authenticity and continued validity of the power, evaluate the power and determine whether the instructions are consistent with it. You agree not to hold us responsible for any loss or damage you may incur as a result of the decision we make whether to follow the instructions given by the agent as long as our decision is made in good faith.

DEPOSITS

Generally: You authorize us to accept transfers, wires, checks, drafts and other items (collectively called “items”) for encashment or deposit into any of your accounts if they are payable to, or to the order of, any one or more of you and whether or not they are endorsed by you. You also authorize us to give cash back to any authorized signer(s) or other designated agent(s) who deposit items payable to the account holder(s).

If you make any deposit or payment which is not accompanied by instructions indicating how or where it is to be credited, we may apply it, at our discretion, to any loan or deposit account you maintain with us. You must complete a deposit slip and include it with each deposit. When you deposit items to your account, you warrant that all endorsements are genuine and that you have authority to negotiate the item to us, and you authorize us to supply any missing endorsements or to process the item for collection without your or any other endorsement. We may refuse to cash or accept for deposit items into a personal account any items payable to a business, even if we are aware that the owner of the personal account also owns the business.

We reserve the right to refuse to process items which bear more than one endorsement or the endorsements of individuals who are not known to us. If you wish to deposit an item which has been previously endorsed by other person(s), we reserve the right to require all endorsers to be present before we accept the item or that their endorsements be guaranteed by the signers’ financial institutions. However, our failure to require this will not affect your responsibilities to us if any other endorsement is questioned or if the item is returned to us because an endorsement is missing.

All items tendered or received for encashment or deposit will be processed by us as your agent, even if we cash the item or give you immediate credit for it. Any credit to an account or the cashing of the item is provisional and subject to final verification and collection. If the item cannot be properly verified and/or collected, we will reverse the provisional credit given to you, or if we have cashed the item for you, we may charge your account for it, in any of these cases without prior notice. We also reserve the right to adjust your account if our records show your deposit receipt is incorrect.

We may refuse to accept a deposit or an addition to an account, limit its size or return all or part of it to you. We reserve the right to limit the amount of funds that may be maintained in an account.

When Deposits Are Deemed Made: If we receive a deposit on a weekend, a holiday, or in our night drop, we will treat it as if we had received it on the next banking day. Saturday and Sundays are not considered banking days, even if we are open.

When Interest Begins: For interest–earning accounts, interest will start on the date of deposit provided the deposit is in cash or by check drawn on any of our offices. If a deposit is drawn on any other bank, it will begin earning interest on the date we receive provisional credit or final payment of the item from the bank or clearing house to which we forward the item as part of the collection process, whichever is first (even we may have placed a hold on the deposit). Electronic deposits (such as those received through an automated clearing house) will be credited and will earn interest on the day the credit is received by us, and provisional credit for other items will usually be received within two or three days, depending on the location of the bank of origin.

Recurring Direct Deposits: The right to receive certain recurring direct deposits made to your account (such as monthly Social Security deposits) usually ceases after death. Sometimes when the source of the deposits is unaware of a recipient’s death, deposits continue after death. The originator, usually a government agency, may then demand that the Bank return any sums directly deposited the month of and after the death or other event that disqualifies the benefit, including single deposits which the deceased and a second person on a joint account may have been receiving. Usually, the Bank must honor such demand and may debit your account or any other account you have with us for all amounts returned to the originator.

Deposited Items Returned: You authorize us to reverse any immediate or later deposit credit given to your account and to charge your account or any other account you have with us in connection with an item we have cashed for you over-the-counter if the item is not finally paid by the institution upon which it is drawn (whether or not you have been allowed to withdraw the funds) and whether or not the dishonor of the item by the other institution was timely. You also authorize us to resubmit any item to the financial  institution upon which it is drawn if the item returned to us unpaid, without giving you notice that item was not paid when first presented.

You authorize us to reverse any deposit or credit or to charge your account or any other account you have with us in connection with a check we have cashed for you if the person who drew the item or any other person or financial institution with an interest in the item claims that any required endorsement on the item (such as that of a co-payee or previous payee) is forged, unauthorized or missing or that the item has been altered; our rights in this regard do not depend upon whether the item actually bore a forged endorsement, an endorsement was actually unauthorized or missing or the item was actually altered.

We may process another financial institution’s return of, or any other claim relating to, an item even if the return or other claim is made electronically rather than by submission of the item to us in its original paper form, and you agree to be bound by our actions in this regard to the same extent as would be the case had the item been submitted to the Bank in its original paper form.

Remotely Created/Demand Drafts: You agree not to deposit remotely created drafts (sometimes called demand drafts) into your account unless you request and receive our consent to do so. If you do deposit a remotely created draft into your account, whether or not we have given you consent to do so, you warrant that the draft is authorized by the person against whose account the draft is drawn. (A “remotely created draft” is a paper item that is neither signed nor intended to be signed by the holder of the account against which the item is drawn but is created by a third party under the purported authority of the holder of that account.)

Foreign Currency Items: If you deposit an item payable in a foreign currency, and it is later returned unpaid to us, we will charge it back against your account. The amount of the chargeback will be determined by applying the selling rate for the foreign currency prevailing on the day when we learn that your deposit will not be paid. We may notify you orally or in writing regarding deposited items which are returned.

Items Sent for Collection: If we refuse to accept an item for deposit and processing through the regular check collection system, we may (at our option or at your request) process it on a “collection basis.” This means we will send it through appropriate channels to the institution upon which it was drawn. If and when we actually receive final payment for the item, we will credit your account for the amount we receive on the date we receive payment. If we do not receive payment, we will notify you that the item was not paid. We may charge a fee for sending an item for collection (see current “Schedule of Fees and Charges”).

FUNDS AVAILABILITY POLICY

Our policy is to make funds from your deposits available to you on the first business day after the day we receive your deposit. At that time, you can withdraw the funds in cash and we will use the funds to pay checks that you have written.

For determining the availability of your deposits, every day is a business day, except Saturdays, Sundays, and federal holidays. If you make a deposit before 6:00 PM (our cutoff time may be as early as 2:00 P.M. at some locations) on a business day that we are open, we will consider that day to be the day of your deposit. However, if you make a deposit after 6:00 PM on a day we are not open, we will consider that the deposit was made on the next business day we are open (our cutoff time may be as early as 2:00 P.M. at some locations).

Longer Delays May Apply: 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 $100.00 of your total deposits on a given business day will be available on the next business day.

If we are not going to make all of the funds from your deposit available on the first business day after the business day of the deposit, we will notify you at the time that 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.

If you will need the funds from a deposit right away, you should ask us when the funds will be available. In addition, funds you deposit by check may be delayed for a longer period under the following circumstances:

• We believe a check you deposit will not be paid.

• You deposit checks totaling more than $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 communications or computer 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 the eleventh business day after the day of your deposit.

Special Rules for New Accounts: If you are a new customer, the following special rules will apply during the first 30 days your account is open.

The first $5,000 from a deposit of U.S. Treasury checks will be available on the first business day after the day of your deposit. The excess over $5,000 will be available on the ninth business day after the day of your deposit. Funds from wire transfers into your account will be available on the first business day after the day we receive the transfer.

Funds from deposits of cash and the first $5,000 of a day’s total deposits of cashier’s, certified, teller’s, traveler’s and state and local government checks will be available on the first business day after the day of your deposit if the deposit meets certain conditions. For example, the checks must be payable to you. The excess over $5,000 will be available on the ninth business day after the day of your deposit. If you do not make the deposit in person to one of our employees, the first $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 ninth business day after the day of your deposit.

WITHDRAWALS

Generally: Withdrawals of all or any part of your account balance will be permitted as authorized on the signature card for your account. This means that we may allow anyone with signing authority over your account, as shown on the signature card, to withdraw or direct or authorize another person to direct a transfer from your account by check, draft, electronic transfer by wire or through an Automated Clearing House (“ACH”) set up,  whether the withdrawal or transfer is initiated in writing, electronically, over the telephone or otherwise. This broad authorization includes withdrawal orders initiated by a third party drawing drafts on your account or initiating electronic fund transfers if the third person is authorized to do so by you or any other person with signing authority over your account. For simplicity, each check, draft, ACH or other withdrawal or transfer instruction may be referred to in this Deposit Account Agreement as an “item.” Items may individually or collectively be for the entire amount in your account and are not subject to the express and specific concurrence of any other signer on your account. In other words, no agreement between you and any other authorized signer on the account which limits the other signer’s authority over the account will be binding on the Bank, even if reflected on the account signature card.

Signatures: We may pay any check which bears a signature or endorsement (including a facsimile signature) resembling the authorized signature(s) found on your account signature card. In addition, under certain circumstances we may pay other items as well.

Stale Checks/Postdated Checks: We may pay or refuse to pay items which are more than six (6) months old. If you do not want an item to be paid, you should place a stop payment order, and you should renew any such order every six months if you are still concerned that it might be paid.

If a postdated check or other item is presented for payment before the date reflected on the item, we may pay or refuse to pay it, imposing a fee for doing so (see our Schedule of Fees and Charges for amount). If you want to be sure that we do not pay a postdated check before its date, you must put a stop payment order on the item.

Limitations on Certain Withdrawals: We may refuse to honor any item when the portion of the account balance that we consider collected is insufficient to cover the item. Even if we have not placed a hold on a deposited item, the funds reflected thereon are not considered collected until we expect to receive provisional credit for them, and even after provisional credit has been received, if the related deposited item is ultimately returned to us, we will reverse the credit to your account. We may refuse or limit withdrawals from any office which is not your branch of account. We may also refuse to honor items drawn on your account if they are directly presented to us by someone we cannot identify to our satisfaction.

Although we do not expect to exercise this right, federal regulations require us to reserve the right to require seven days advance notice prior to the withdrawal of funds from interest-bearing accounts.

We may also require you to withdraw all or any part of any funds on deposit by giving notice to you or any authorized signer on the account. If the funds are not withdrawn, we may return the funds to you by sending you a check.  Thereafter, the funds will stop earning interest (even if the check is returned or remains uncashed for any reason).

At our sole discretion we may require the signatures of all account holders for checks, transfers or other withdrawals and/or the closing of any account.

We may also require evidence, satisfactory to us, of each person’s continuing authority to give instructions regarding an account. The existence of this right shall not be deemed to impose any duty to investigate or confirm such authority; however, in no event shall we be liable for any delay or refusal to follow instructions which occurs as a result of any dispute over the authority of anyone to act on behalf of the account holder. We may return checks and other items, marked “Refer to Maker” (or similar language) in the event there is a dispute over the ownership or control of an account.

Early Withdrawals from Time Deposits: Time deposit customers contract to keep certain funds on deposit for a fixed period of time. Partial withdrawals and additional deposits are not permitted, and we reserve the right to refuse early withdrawals from time deposits, with or without cause. If we permit an early withdrawal from a time deposit, we will assess an early withdrawal penalty, unless the withdrawal follows the death or court-declared incompetence of an account holder.

Early Withdrawal Penalties:

• Any withdrawal made within the first six (6) calendar days after a time deposit account with a maturity of less than 32 days is opened or renewed will result in a penalty equal to seven (7) days’ simple interest on the amount withdrawn (whether or not the interest has been earned).

• Any early withdrawal made from a time deposit account with a maturity of from thirty two (32) days to one (1) year will result in a penalty equal to one (1) month’s interest  (whether or not earned).

• Any early withdrawal made from a time deposit account with a maturity of exceeding one (1) year will result in a penalty equal to three (3) months’ interest (whether or not earned).

Grace Period for Maturing Time Deposits: A 10 day grace period begins the day after a time deposit matures. During the grace period you may either make one withdrawal without penalty or make one additional deposit to your account. If the last day of the grace period falls on a weekend or bank holiday and you wish to make a withdrawal or deposit, you must do so on the last business day immediately before the end of the grace period.

If 50% or more of the deposit is reinvested within the grace period, we will continue to pay interest on the withdrawn amount from the maturity date until the withdrawal date at the rate payable prior to maturity, and on the reinvested amount at the rate applicable to the renewed deposit.

If less than 50% of the deposit is reinvested during the grace period, no interest will be paid following the maturity date and interest on the reinvested amount, if any, will not begin until the date some of the funds were withdrawn.

Savings/Money Market Account Limitations: Federal law requires that an account holder may make no more than six (6) preauthorized transfers and/or withdrawals during any monthly statement cycle. A “pre-authorized transfer” includes any arrangement by us to pay a third party from your account upon written or oral instruction, including an order received through an ACH, or any arrangement by us to pay a third party from your account at a predetermined time or on a fixed schedule. It also includes transfers initialed by telephone, telecopy, email or other electronic transmission. No more than three (3) of the six (6) preauthorized transfers may be made by check, draft, debit card or similar order made by you and payable to third parties. If you exceed either of these limits we may but need not honor the extra item(s), even if there are sufficient funds to cover them, and your continued misuse of the account may require us to close your account or convert it to a non-interest-bearing checking account.

Stop Payment Orders on Checks: If you write a check which has not yet cleared, you or anyone else authorized to sign checks on the account may be able to prevent its being paid by coming into any branch location and completing a proper and timely Stop Payment Order.

In order to stop payment on a check, it must be described with certainty. This generally requires that the following information be provided:

• Date of check

• Payee

• Exact amount

• Check number

• Account number

We will not be responsible for orders if we do not have a reasonable opportunity to act on them before final payment of the items. Please note that, to control our costs and,  therefore, keep our stop payment fee at a reasonable level, we use our computer system to stop payment on checks you direct us not to pay. As a result, we must provide our computer with the correct information on the subject check—the exact amount of the check, correct check number and date, etc. Even a small error in this information can cause the computer to miss the item, and you agree that we will not be responsible if this occurs. If you are unsure about any of the information you give us in your Stop Payment Order, please let us know. If you do so, we may be able to implement manual protections to catch the check before it is paid; however, we may impose a greater Stop Payment Order fee in view of the extra efforts that will be required to monitor your account. You understand that our automated Stop Payment Order system may not be effective to stop payment of a check or other paper item if, after you issue it, the item is converted into an ACH item.

We are not obligated to accept oral Stop Payment Orders. If we elect to honor an oral order, it will be enforced only if you sign a written Stop Payment Order and we receive it during normal banking hours within 14 days. We may release any verbal Stop Payment Order for which we do not receive written confirmation within 14 days. Our records or absence of records will be conclusive evidence of the existence of, and our acceptance or rejection of, any verbal Stop Payment Order.

There is a per-check charge for each Stop Payment Order requested. Each order will remain in effect for six (6) months and then will automatically expire. If the check is still outstanding after that time, another Stop Payment Order may be requested for an additional fee (see “Schedule” for amount).

Even if we successfully stop payment on an item pursuant to your Stop Payment Order, the party holding the check (which might be us) may be entitled to enforce payment of the item against you.

If we inadvertently pay any check over a correct, valid and timely Stop Payment Order, we will recredit your account for the amount of the loss you prove has occurred. We will then have the right to recover the amount from the payee and/or any other holder of your check. You agree to cooperate fully with us in any legal actions that we subsequently take against such person(s). You will not be able to stop payment on cashier’s checks we issue at your request.

Overdraft Privilege

Courtesy Overdraft Privilege is a discretionary overdraft service from your Bank. Rather than automatically returning or rejecting items such as checks, ATM withdrawals, debit card purchases, electronic funds transfers or other payment/withdrawal requests presented for payment from your account because there are not sufficient funds (“NSF”) in your account to cover the items, we will consider payment of your reasonable overdrafts up to your approved limit. Our normal NSF fee per item will be applied to your account, whether we honor or dishonor the item(s) that overdraw, or, if paid, would overdraw your account. Please refer to the Courtesy Overdraft Privilege Policy for the specific provisions of this service.

Overdrafts and Returned Checks: If you do not have sufficient available funds on deposit in your account to cover the amount of an item––because of other items having been paid, because some funds posted to your account have not yet been made available for withdrawal, because a deposited item was dishonored by the financial institution upon which it was drawn, because fees may have been charged to your account or for any other reason––including an electronic fund transaction, we may refuse to honor the item or, in our sole discretion, we may create an overdraft by paying the check or permitting the transaction. Either way, there will be a service charge for each item or transaction (see current “Schedule of Fees and Charges”), and if we pay the item, you will be obligated to cover it.

In addition to any fee we may charge to process an item because there are not sufficient funds to cover it, a daily service charge may be imposed for each day the overdraft continues after the 5th business day.

You agree to pay us the amount of any overdraft immediately and without notice or demand from us, except to the extent that the terms of our Courtesy Overdraft Privilege might apply to the overdraft and give you a longer period to cover the overdraft. Notwithstanding the provisions of Commercial Code § 4401, which provide that “[a] customer is not liable for the amount of an overdraft if the customer neither signed the item nor benefited from the proceeds of the item,” each account holder expressly agrees to be jointly and severally responsible for paying any overdrafts created by any authorized signer(s) or party to the account.

Our payment of any checks which create overdrafts (whether or not under our Courtesy Overdraft Privilege) in no way obligates us to continue the practice at a later time and we may discontinue permitting overdrafts without notice to you.

We may charge or set off funds in your account for any direct, indirect and/or acquired obligations that any owner owes us, regardless of the source of the funds in the account, to the fullest extent permitted by law. This provision does not apply to IRA or tax qualified retirement accounts, to consumer credit card obligations, or where otherwise prohibited by law.

Restrictive Legends: We are not required to honor any restrictive legend on checks that you write unless we have agreed to the restriction in writing, with a signature by an officer of the bank. Examples of restrictive legends are “must be presented within 90 days” or “not valid for more than $1,000.”

Check Pricing and Printing: Check prices vary according to the types of checks you select. You can obtain the current price of checks by contacting your office of account. Check charges may vary from time to time without specific notice to you.

If you arrange for the printing of your own checks, the form, encoding and format of the checks must follow our check specification requirements and be approved by us in advance.

You are responsible for checking the accuracy of all printed information shown on your checks. If you find an error, please notify us immediately. Our liability in matters resulting from incorrectly printed checks ordered through us will be limited to the replacement or replacement costs of such checks. We assume no liability for inaccuracies on or our reasonable refusal to accept the form, encoding and format of checks ordered through third parties.

Telephone Transfers: If we receive instructions by telephone from an authorized signer on your account, we may, at our sole discretion, transfer funds from one account to another in your name.

We normally do not permit withdrawals from an account by telephone, and this does not constitute an agreement by us to permit such transactions. Savings Account customers will not be allowed to make more than three telephone and/or preauthorized transfers or withdrawals during a statement or interest cycle or calendar month, unless the transfer is performed under a specific electronic fund transfer arrangement with us.

ELECTRONIC FUND TRANSFERS

This section of the Deposit Contract is important for our customers who have signed up for or will use any of the electronic banking services we offer. Such services include our VISA® Debit Card, and automatic transfer services that you may arrange with others to deposit money into or transfer money from your account. If you have signed up for our Internet Banking or Bill Payment Service, in addition to the provisions of this Deposit Account Agreement and Disclosure, a separate agreement and disclosure will govern those services.

All of these services involve electronic fund transfers (“EFTs”), through which you or others can initiate transfers of money to or from your deposit accounts. If you authorize any EFTs to or from your deposit accounts these terms and conditions will apply to those transfers. You agree to be bound by the terms and conditions contained in this part of your Deposit Contract if you sign or use, or authorize others to sign or use your Card or the personal identification numbers (“PINS”) associated with any of these Cards or services, or if you authorize others to initiate transfers to or from your account.

EFTs are electronically initiated transfers of funds involving one or more of your deposit accounts. They may include deposits, withdrawals or transfers to or from your account, initiated by you or by a third party acting on your behalf or pursuant to your instructions. Transactions initiated with your VISA® Debit Card are collectively referred to as “Card Transactions” and VISA® Debit Cards are collectively referred to as “Cards.”

CARD SERVICES

Services Available with Your Card: If you have been issued a Card and a PIN, you may use your Card at any ATM or Point of Sale (“POS”) terminal which displays the Star System® or Cirrus®, Pulse, Plus or Quest logo. The following transactions may be performed with your Card at any ATM operated by a member of any of these networks:

• Withdraw cash from a designated checking or savings account.

• Make a deposit to a designated checking or savings account.

This feature is available only at ATMs operated by the Bank.

• Transfer money between a designated checking account and a designated savings account. This feature is available only at ATMs operated by the Bank.

• Inquire about your deposit account balances. (Any balance information you obtain at an ATM may not reflect recent deposits, withdrawals or transfers to or from the account.)

• Make a loan payment. This feature is available only at ATMs operated by the Bank.

• You can pay for purchases of goods and services from any merchant who operates a participating POS terminal. At some of these locations, you also can receive cash in  addition to the goods or services you have purchased through the use of a POS terminal. The amount of the purchase and/or cash will be charged to the account shown as “checking account #1” on your application for the Card. This account is called your “primary checking account.”

Services Available with Your Card: You can also use your Card to pay for purchase of goods or services from your primary checking account at any merchant who honors cards bearing the VISA® logo even if the merchant does not have a POS terminal. (A PIN may not be required to complete these transactions.)

Receipts: You will get a receipt at the completion of each Card Transaction. These receipts should be reconciled to your monthly statements.

Card Transaction Limitations: Transfers between your accounts and initiated at an ATM or POS are not limited, except that you cannot transfer more than the available balance in the “from” account. The amounts you may withdraw or purchase with a Card are subject to the following limitations:

• Cash Withdrawals: Daily limits are subject to a predetermined amount assigned to your account by the Bank, not to exceed the available balance in your account including any discretionary overdraft the Bank may consider paying at the time of withdrawal from ATMs on any given day. Additional limitations may exist for ATMs operated by other institutions. For example, some ATMs have minimum withdrawal amounts (usually $20), and most only dispense bills in $20 and, sometimes $50 denominations. Conversely, we may, in our absolute discretion, permit withdrawals in excess of your available balance, which would result in an overdraft and the imposition of a non-sufficient funds fee.

• Point of Sale Transactions at VISA® Merchant Locations: Daily limits are subject to a predetermined amount assigned to your account by the Bank, not to exceed the available balance at the time of purchase. We may, in our absolute discretion, permit a transaction in excess of your available balance, which would result in an overdraft and the imposition of a non-sufficient funds fee. (Note that this limit may be affected by “open transactions” from previous days. An “open transaction” is one that was authorized but has not been posted to your account, such as when a merchant, such as a filling station, car rental, hotel or other travel service providers requests authorization for more than the amount  you expect to or actually pay for the purchase. In other words, if a merchant obtains a purchase authorization on Monday and the transaction [in that or a different amount] is not posted to your account until Wednesday, the authorized amount would reduce your balance available for other transactions until the transaction is posted on Wednesday.)

Point of Sale Transactions at Other Merchant Locations: Daily limits are subject to a predetermined amount assigned to your account by the Bank, not to exceed your available balance at the time of purchase. We may, in our absolute discretion, permit a withdrawal in excess of your available balance, which would result in an overdraft and the imposition of a non-sufficient funds fee.

Electronic Check Conversion: You may authorize a merchant or other payee to make a one-time electronic payment from your checking account using information from your check to pay for purchases or to pay for bills.

ATM Safety Tips: The following is a list of safety precautions regarding the use of ATMs. Please read and follow these safety tips:

• Mark each transaction in your account record, but not while at the ATM or night deposit facility.

• Always save your ATM receipts. Don’t leave them at the ATM or night deposit facility because they may contain important account information.

• Compare your records with the account statements you receive.

• Don’t lend your Card to anyone.

• Protect the secrecy of your PIN. Don’t tell anyone your PIN. Don’t write your PIN where it can be discovered. For example, don’t keep a note of your PIN in your wallet or purse.

• If you lose your Card or it is stolen, promptly notify us. You should consult the other disclosures you have received about electronic fund transfers for additional information about what to do if your Card is lost or stolen.

• We want our ATMs to be safe and convenient for you. Therefore, please tell us if you know of any problem with a facility, such as when a light is not working or there is any damage to a facility. Please report any suspicious activity or crimes to both the operator of the facility and the local law enforcement officials immediately.

PROVISIONS APPLICABLE TO ALL EFTS

General Limitations: You understand that it is your responsibility to assure that you do not exceed any limitations applicable to any account you access through an EFT service, and that you do not try to transfer or authorize a payment for more money than you have in the source account (unless the shortage will be covered under an overdraft credit arrangement). In this regard, you should also remember when preauthorized transfers, such as bills that are regularly and automatically paid, are scheduled to occur, so that there are always enough available funds in the source account to cover all of your EFTs and other items, as and when they occur. If EFTs frequently result in overdrafts to your account or in transfers or payments that are not made due to insufficient funds, we may revoke your ability to access your account through some or all of the EFT services described in this agreement.

If your account has insufficient collected funds to cover all of the EFTs performed on the same business day, we may assign a higher priority to payment of ATM withdrawals even if they occur later in the day than other EFTs. Whether or not we honor the transaction,  overdraft fees may be payable in accordance with our usual policies.

Authorized Users: If there are other signers on your deposit account, you hereby authorize each of them to use your Card and PIN and these services, and to make electronic funds transfers, even if your internal policies require two or more signatures for withdrawals or other transactions.

Periodic Statements: You will get a monthly account statement on your consumer deposit accounts.

Charges for EFTs: The standard fees applicable to your account will apply whether you use your account in a traditional way or through an EFT service. In addition, when you apply for and are issued a Card, you may be charged other fees for use of your Card at locations other than our own ATMs.

Our Schedule of Fees and Charges describes all of our account and EFT charges. A current Schedule accompanies this disclosure.

Some operators of network ATMs impose charges when you use your Card at their network ATM (this will not happen when you use a Card we have issued to you at an ATM operated by us). You will receive a disclosure from that ATM operator before you complete the transaction, and you will be able to cancel the transaction and avoid the charge before the transaction is completed.

Procedures, Rules and Your Responsibilities Regarding PINS and Cards: You agree not to disclose or otherwise make any PIN applicable to any EFT service available to anyone not authorized to sign on your accounts. Do not keep your PIN with your Card or near your telephone or computer. For protection and security, memorize your PIN and destroy all written evidence of it. When using a Card, if the wrong PIN is entered 3 times, the Card may be retained by the ATM for your protection.

By using your Card or PIN or authorizing a third party to access your account electronically, you authorize us to make all withdrawals and transfers into or from your accounts in accordance with the instructions given. All transactions are governed by our existing rules and regulations concerning those accounts. All Cards are nontransferable and you agree that the cards are our property.

Business Days: Our “business days” are Monday through Friday (except bank holidays) for purposes of EFT activity; even though certain branches may be open on Saturdays or Sundays.

Procedures for Lost or Stolen Cards, PINS or Unauthorized Transactions and Your Liability: Tell us AT ONCE if you believe your Card or PIN has been lost or stolen or if you believe that an electronic transfer has been made without your permission using information from your check. You should immediately call us at 866-869-6673, 7:00 a.m. - 7:00 p.m. weekdays or Saturdays 9:00 a.m. – 2:00 p.m., excluding holidays, or write to us at P.O. Box 994630, Redding, CA 96099-4630. For issues relating to a Card after business hours, you should call 800-523-4175.

Please note that EFTs initiated by someone to whom you have given your Card or PIN or your authorization to draw on your account are not considered unauthorized transactions unless you have notified the Bank that transfers by the previously authorized person are no longer authorized.

Telephoning the Bank is the best way of keeping your possible losses down. You could lose all the money in your account, plus your maximum overdraft line of credit (if applicable). However, if you are an individual, your Card is used primarily for personal, family and household purposes the following limitations on your liability apply, depending upon the type of unauthorized use.

• Card Used at an ATM: If you tell the Bank within 2 business days after you learn of the loss or theft of your Card, you can lose no more than $50 if someone uses your Card without your permission. If you do NOT tell the Bank within 2 business days after you learn of the loss or theft of your Card or PIN and the Bank can prove the Bank could have stopped someone from using your Card or PIN without your permission if you had told the Bank, you could lose as much as $500 (or more, as stated immediately below).

• CARD USED TO BUY GOODS OR SERVICES FROM A MERCHANT: In transactions processed through the VISA® system where no PIN is used (for example Card transactions at a merchant location that does not have or use a Point of Sale terminal that requires the cardholder to punch in his or her PIN), you will have no liability for unauthorized  transactions,  provided that you report the unauthorized transaction to us. This special zero liability limit will not apply if your PIN was used to complete the transaction or if we determine that you were grossly negligent or fraudulent in the handling of your account or Card, in which case you could lose no more than $50 unless we determine that your claim is fraudulent if you tell the Bank within 2 business days after you learn of the loss or theft of your Card.

If you are an individual, your account is used primarily for personal, family and household purposes and your statement shows transfers that you did not make, tell us at once. If you do not tell us within 60 days after the statement was mailed to you, you may not get back any money you lost after the 60 days if we can prove that we could have stopped someone from taking the money if you had told us in time (and in the case of a Card  transaction, we determine that you were grossly negligent or fraudulent in the handling of your Card or account).

If a good reason (such as a long trip or a hospital stay) kept you from telling us, we will extend the 2 business day and 60 day time periods stated immediately above.

Since your Card is not a credit card, if you have a dispute with the merchant regarding the quality, price warranty or otherwise regarding the goods or services you purchase with your Card, you will have to settle your dispute with the merchant directly. We are not responsible for the merchant’s actions, including any misrepresentations by the merchant or the merchant’s refusal to accept your Card.

Liability for Non-Consumer Accounts: You are liable for all transactions using your Card and PIN, whether or not authorized by you, for transactions against non-consumer accounts.

Procedures for Errors or Questions About Your Electronic Funds Transfers: If you think your statement is wrong, an error has occurred, or you need more information about an electronic funds transfer listed on your account statement, transaction receipt, or other documentation, you should telephone or write to your branch as soon as you can. Or, you may call us at 866-869-6673, 7:00 a.m. - 7:00 p.m. weekdays and Saturdays 9:00 a.m. – 2:00 p.m., excluding holidays, or write to us at P.O. Box 994630, Redding, CA 96099-4630.

• We must hear from you no later than 60 days after we sent the FIRST statement on which the problem or error appeared. You will need to tell the Bank:

• Your name and account number.

• Describe the error or transfer in question and explain, as clearly as you can, why you believe it is an error or why you need more information.

Tell us the dollar amount of the suspected error, and approximately when the error took place. If you tell us orally, we may require that you send your complaint or question in writing to us within 10 business days. We will determine whether an error occurred within 10 business days (20 business days for new accounts or 5 days for Cards), after we hear from you and if an error has occurred will correct any error promptly. If we need more time, however, we may take up to 45 days (90 days for errors or questions involving new accounts, a transaction initiated outside of the United States or a transaction at a point-of-sale terminal) to investigate your complaint or question. If we do this, you will have the use of the funds in question after the 10 business days (20 business days for new accounts or 5 days for Cards). If we ask you to put your complaint or question in writing and we do not receive it within 10 business days, then we may not credit your account during the investigation. Your account is considered a new account for the first 30 days after the first deposit is made, unless you already have an established account with us before this account is opened.

If we decide that there was no error, we will send you a written explanation within 3 business days after we finish our investigation. You may ask for copies of the documents that we used in our investigation.

Use of Card for Gambling or Illegal Purposes: You agree not to use your Card for any illegal transaction or in connection with any Internet gambling or similar activities, even if such gambling or similar activities are lawful.

Confidentiality: See our Privacy Policy disclosure at the beginning of this booklet.

The Bank’s Liability for Failure to Complete an Electronic Funds Transfer: If we do not complete an electronic funds transfer or transaction to or from your account on time or in the correct amount according to our agreement with you, we will be liable for your losses or damages only to the extent provided by law. For example, the law does not make us liable:

• If, through no fault of ours, you do not have enough money in your account to make the transfer or complete the electronic transaction, or if the transaction would go over the credit limit of your overdraft line, if you have one.

• If the funds in your account are subject to an uncollected funds hold, legal process or other claim, or encumbrance restricting transfers.

• If circumstances beyond our control (such as fire, flood, labor disputes, power or computer failure) prevent the electronic transfer from being completed or made despite any reasonable precautions that we have taken.

• If your account has been closed.

• If our failure to complete the transaction is done to protect the security of your account.

• If the ATM where you are making the transfer does not have enough cash.

• If the ATM was not working properly, and you knew about the breakdown when you started the transaction.

• If we do not receive proper and timely instructions regarding the transaction.

• If the transfer or payment information supplied to us by you or by third parties is incorrect or incomplete.

These are examples only; there may be other exceptions.

Notice of Preauthorized Deposits: If you have told someone (such as your employer, your pension fund or the Social Security Administration) to make preauthorized deposits directly to any of your accounts at least once every 60 days, the person or company making the deposit may have agreed to tell you every time they send us money. If not, you can call us to find out whether or not the deposit has been made.

Credit given by us to you with respect to an ACH credit entry is provisional until we receive final settlement for such entry through a Federal Reserve Bank or correspondent bank. If we do not receive such final settlement, you agree that we may reverse the amount credited to your account in connection with such entry, and the party making payment to you (that is, the originator of the entry) via such entry shall not be deemed to have paid you the amount of such entry.

Under the operating rules of the National Automated Clearing House Association which are applicable to ACH transactions involving your account, we are not required to give notice to you of receipt of an ACH item, and we will not do so other than by reflecting the item in the first periodic statement we provide to you following our receipt of the item. If you wish to verify whether your pre-authorized transfer has been received and credited to your account, you may call your branch office.

Notice of Payment in Varying Amounts for Preauthorized Transfers: If you have arranged in advance to make regular payments out of your account, and these regular payments may vary in amount, you must arrange with the person or company you are going to pay to tell you, at least 10 days before each payment, when it will be made and how much it will be. You may choose instead to get this notice only when the payment would differ by more than a certain amount from the previous payment, or when the amount would fall outside certain limits that you set.

How to Stop Preauthorized Transfers: If you have arranged with someone in advance to have regular preauthorized electronic payments made out of your account, you can stop these payments. Here’s how.

Call us at 866-869-6673, 7:00 a.m.- 7:00 p.m. weekdays and Saturdays 9:00 a.m. – 2:00 p.m., excluding holidays, or write to us at P.O. Box 994630, Redding, CA 96099-4630, in time for us to receive your request 3 business days or more before the payment is scheduled to be made. If you call, we may require you to put your request in writing and get it to us within 14 days after you call, otherwise your oral request will expire.

A stop payment order received less than 3 business days before the scheduled date of the transfer is not binding on us, although we, in our sole discretion, may attempt to stop the transfer. We assume no responsibility for our failure or refusal to do so, even if we accept the stop payment order.

A stop payment request will only stop a particular payment from being made. If you want all scheduled future payments to be canceled, you must specifically advise us in writing of that intention and you must also inform the person or company with whom you arranged for the electronic payment service that you want all future payments to be canceled.

If we receive your request to stop one of these payments 3 business days or more before the payment is scheduled and we improperly fail to stop the payment, we will be liable for your losses or damages, which may be less than the amount of the payment.

These procedures apply only to preauthorized electronic payments.

Cancellation: We may cancel, modify or restrict the use of any EFT service or access upon proper notice. Our action can be immediate if we believe such action is necessary to protect the security of the Bank or of your accounts. You may cancel any EFT service upon notice to us, with or without cause. Each Card we issue to you is the property of the Bank. You agree to return all Cards to us upon request.

If you ask us to terminate the use of any Card, you will remain liable for subsequent transactions initiated through the use of the Card until you have destroyed or returned it to us.

GENERAL PROVISIONS REGARDING YOUR ACCOUNT AND EFTS

Safeguarding Checks: It is important that you keep your blank checks in a safe place—preferably locked and secure, and certainly out of sight. If you use a facsimile stamp to “sign” your checks, that, too, must be secured. If you fail to secure your blank checks (and facsimile stamp) and someone who is not authorized to do so issues checks on your account, you might not be able to obtain a refund from us if we pay the items in good faith.

Fees and Charges: Our Schedule of Fees and Charges describes the limitations and the most frequently encountered charges associated with our accounts and services. As such, it is an important part of your agreement with us. Some account terms and services (such as certain trust, business and public fund deposits) are negotiated separately and may be subject to other written agreements with us. Certain fees may also change without specific notice to you.

A copy of the Schedule of Fees and Charges will be furnished to you when your account is opened and when this Deposit Contract is furnished to you in connection with a new service you will be receiving or are considering. The current Schedule is also available for inspection at our branches during regular banking hours. We reserve the right to modify our fees and charges from time to time. You agree to pay the fees and charges associated with your account. Fees and charges are normally deducted automatically from your account unless the law otherwise requires.

You can avoid the regular monthly service charge on certain accounts by maintaining one of the qualifying balances set forth in the Schedule. If your balance falls below the applicable qualifying balance, we may assess a monthly service charge and a charge for each item processed against your account. Interest on some accounts may be rounded on a daily or other periodic basis to the nearest whole cent. Interest paid on a quarterly basis may vary from quarter to quarter because the number of days in each quarter varies.

Statements: We will provide you with statements reflecting the activity and balances of your account unless it is a time deposit account or is inactive. Your statements and notices will be mailed to the last address listed with us for the account. If your signature card indicates that statements and notices are to be held by us, we mail them to the last address on file for the account if they are not picked up within thirty (30) days.

Statements, notices and other documents (such as change in term notices and checks) held by us at your request or because you fail to provide us with a current address, are deemed to be delivered to you upon their receipt or preparation by the office of account, even though the documents are mailed or delivered to you at a later time. Statements, notices and other documents (including those returned to us as undeliverable by the post office) are deemed delivered to you on the date we first placed them in the U.S. Mail. The delivery date may be important to you since any time deadlines or notice periods might begin from that date.

You are responsible for inspecting your statements and images of paid items as soon as you receive them and reporting any irregularities to us immediately. If you are a business, we recommend that you assign at least two individuals to perform this task, and that these individuals are not ones who are responsible for writing checks and authorizing other items on your account.

Your failure to carefully monitor your account by reconciling statements and/or reviewing your account activity online may affect your ability to recover losses that might result from forgeries, alterations or other unauthorized activity regarding your account, whether committed by your trusted employees, agents and accountants or by unknown third parties.

If you claim a credit or refund because of a forgery, alteration or any other unauthorized withdrawal, you agree to provide us with an affidavit containing whatever reasonable information we require concerning your account, the transaction and the circumstance surrounding the loss.

Receipts: At our discretion, a receipt may be used instead of receipting your checking or savings book. These receipts are your only records of making your deposits. WITHOUT these receipts, we are unable to locate a lost deposit. It is your responsibility to keep these receipts on your account until you have balanced your statements and all deposits are accounted for.

Notices: We may send notices to any party to an account by mailing or delivering a notice to the last address on file for the account. Notice to any account holder or agent shall be considered notice to all account holders.

If you have a business account, you agree to notify us promptly of any change in the business name, identity or authorized signers (such as officers or others named on the signature card).

You must mail or deliver (during normal banking hours) all notices which are required by this agreement or by law to us at the office of account and/or any other address we specify. If you have multiple accounts and services, you may have to send notices to more than one address. Notices sent to us at the wrong address may not reach the correct office or may be delayed; unless and until we receive a notice at the correct address, the notice may not be effective.

Closing or Suspending Accounts: We may close your account at any time, with or without cause, and remit the balance to any authorized signer at the last address shown for the account on our records. An account may be automatically closed, without notice, if its balance reaches zero. We may refuse to accept deposits and may dishonor any item presented for payment after the account is closed. However, at our sole discretion, we may honor items presented for payment after the account is closed if the items have been guaranteed by us to third parties (such as under our check guarantee program). You remain responsible for such items, which may be treated as overdrafts.

We may charge an early closure fee if you or we close your account within the first ninety (90) days of opening.

If an interest-bearing account is closed for any reason before accrued interest is actually paid, interest may or may not be paid for the last statement or interest period (see individual accounts for details).

Disputes: Sometimes we are brought into the middle of a dispute among the account-holders over an account or a dispute between the account holders and others claiming to be owners of or persons entitled to control or withdraw funds from a deposit account. When we know or suspect that this is happening, we may choose any of the following courses of action:

• We may ignore any instructions (such as an instruction by one account holder not to honor items or other withdrawal orders by another account holder) that conflict with the terms of the signature card for the account unless all account holders sign the instructions;

• We can require that all account holders sign any item or other Instruction;

• We can close the account and issue a single cashier’s check for the account balance jointly payable to all account holders, and we may mail or deliver that check to any one of the account holders;

• We can deposit the account balance with the clerk of a court in connection with an interpleader action we bring or in response to a court action naming us as a party. The court would then decide who is entitled to the funds. If we make an interpleader deposit with the court, the court will be asked to award us our costs, including attorney’s fees, for the lawsuit. The law provides that this award is payable out of the deposit.

• We can take any other action we believe to be reasonable under the circumstances even if the action is not listed here. These actions include, but are not limited to, any specific procedures that may be applicable under a law or regulation.

You agree not to hold us responsible for, and to indemnify and defend us against, damages that may result from any decisions we make in this regard as long as our decision and action (or inaction) is made and taken in good faith.

Address Change: You agree to give us at least thirty (30) days’ advance written notice of any change in your address or the account mailing address.

Adjustments: We may make adjustments to your account from time to time, which reflect corrections or changes to your balance. Adjustments might occur, for example, if deposited items are returned unpaid, deposits are posted in the wrong amount or to the wrong account or posting of a deposit is delayed.

Amendments: Except as otherwise required by law or provided in this agreement, the terms of this Deposit Contract may be changed and new terms may be added by us at any time, upon notice sent by us to your mailing address for the account according to our records at the time the notice is prepared for mailing. Unless stated otherwise in the notice or the law requires advance notice, the notice will be effective when it is personally delivered to you or deposited in the U.S. Mail (see Notices).

Currency Transaction Reporting: The Bank Secrecy Act, a federal law, requires all banks to report to the government single or multiple deposits or withdrawals of currency aggregating more than $10,000.00 per day. This law was established to aid federal authorities to recognize the flow of currency generated from illegal activities and to prevent terrorism, and our reporting requirement applies whether or not we know or suspect that the transaction(s) have criminal or terrorist connotations. We are also required to report transactions or activity that we recognize to be suspicious in a criminal context, and this law forbids us from notifying you whether we have made or intend to make such a report.

If you have any questions about the Bank Secrecy Act, contact your local IRS office.

Financial Elder Abuse Reporting Act of 2005 (Personal Accounts and Sole Proprietors only): The Financial Elder Abuse Reporting Act of 2005 (“Abuse Reporting Act”) requires officers and employees of financial institutions, commencing on January 1, 2007, to report any suspected financial abuse of an elder (a California resident who is 65 or older) or a dependent adult (a California resident who is 18 or older but younger than 65 with specified physical or mental limitations that restrict the person’s ability to carry out normal activities) to a county adult protection services agency or local law enforcement (“Reportable Transaction”). The Abuse Reporting Act is silent on what, if any, actions a financial institution should take with respect to the processing of a Reportable Transaction when it becomes aware before a transaction is processed that the requested transaction may involve suspected financial abuse and is subject to the mandatory reporting requirement of the Abuse Reporting Act. You agree that if any of your accounts are involved with a Reportable Transaction, that we may follow any order or request made to us by a county adult protection services agency or local law enforcement not to process the Reportable Transaction and/or freeze your accounts (“Instruction”). In the absence of any such instruction, you agree that we may, but are not required to, delay or suspend the processing of any Reportable Transaction requested by you or any person acting on your behalf (e.g., an attorney-in-fact, or trustee) in order to seek further information from you and/or initiate a legal proceeding with a court of competent jurisdiction to determine the legitimacy of the Reportable Transaction. You agree to indemnify, defend and hold us harmless from any loss, damage, claim, action and liability that results from, and any charges and costs (including attorneys’ fees) we incur, in connection with (1) any delay or suspension of the processing of a Reportable Transaction (including, but not limited to, any delay or suspension arising due to the Bank complying with an Instruction, (2) the initiation of a lawsuit to determine the legitimacy of a Reportable Transaction or (3) the failure on our part to delay or suspend the processing of a Reportable Transaction and/or initiate a lawsuit to determine the legitimacy of a Reportable Transaction.

Death or Incompetence: You agree to notify us immediately regarding the death or incompetence of any owner or authorized signer on your account. (If the person has not been declared by a court to be incompetent, we may require you to furnish other documentation to support your notice, before we act upon it.) You understand that we may pay items or permit withdrawals written or authorized by the deceased or incapacitated person after his or her legal incapacity or death unless we know of the incapacity or death, and, to the extent permitted by law, we may pay items or permit withdrawals even after we learn of such an event. We may also freeze, refuse, and/or reverse deposits and transactions (such as pension or federal benefit payments to the deceased) if the party on whose behalf such benefits are paid dies or otherwise loses eligibility for the payment.

Federal Deposit Insurance: Funds on deposit in our deposit accounts are insured by the Federal Deposit Insurance Corporation (FDIC), an agency of the United States government. We can supply you with information explaining your insurance coverage for deposits in different types of accounts.

For more information on FDIC coverage, you may wish to seek assistance from the FDIC’s website, http://www.fdic.gov/edie/index.html, or contact:

Federal Deposit Insurance Corporation
San Francisco Regional Office
25 Ecker Street, Suite 2300
San Francisco, California 94105
(415) 546-0160

Governing Law: Except as otherwise provided by this agreement, your accounts will be governed by federal law and the laws of the State of California.

Headings: The headings in this agreement are for convenience only and are not part of these rules.

Inactive/Dormant Accounts: If you do not conduct any transactions involving your checking or savings account for twelve (12) consecutive months, we will classify your account as “inactive.” After twenty-four (24) months, your account will be classified “dormant.” Time deposits are classified as inactive if you do not withdraw the deposit after it matures, or, if it is automatically renewable, you do not correspond with us regarding the account for a substantial period of time.

Service charges for “inactive/dormant” accounts are the same as service charges for active accounts.

Escheat: If for three years there is no activity by you on your matured time deposit or other account, such as making a deposit or withdrawal or presenting the appropriate record for the crediting of interest, writing to us about your account or having other contact with us as shown in our records, we must transfer the balance of the account to the State of California. We will turn the funds in your account over to the State, if you do not do any of the following for three (3) years:

• Increase or decrease the amount in your account. (Note: This does not include bank-initiated transactions, such as service charges and interest payments.)

• Correspond in writing with us concerning the account.

• Otherwise indicate an interest in the account (such as by letter or other record on file with us).

If you learn that an account held in your name has been turned over to the State, you can reclaim any funds in the account by submitting proof of ownership to the State Controller’s Office, Sacramento, California.

Legal Process: We will comply with any writ of attachment, execution, garnishment, tax levy, restraining order, subpoena, warrant or other legal process which we believe to be valid and binding, and we may accept such process at the branch at which your relationship with us is based or at any other location. Unless the law forbids us from doing so, we will notify you of any legal process by telephone or by mail. We may charge you a fee for handling such process (see Schedule). This fee may be in addition to any fee we may collect from the party initiating the legal process.

Severability: If any part of this Deposit Contract is found to be unenforceable, its remaining portions shall remain in full force and effect.

Business Days: Our business days are Monday through Friday, excluding holidays. If you perform transactions on a non-business day or after our processing cutoff time, your transactions may not be posted to your account until the next business day.

Other Agreements: You may have another agreement with us which, by its terms, supersedes this agreement in whole or in part. For example, if you are a governmental unit, some of the terms of this agreement may not apply to you. If you are a business customer, certain provisions of your other agreements with us (such as Night Depository Agreements) may supersede some of the terms of this agreement, to the extent that are inconsistent.

Transfers and Assignments: You may not grant, transfer or assign any of your rights to an account without our prior written consent. For example, if you establish a living trust and wish your deposit account to be a trust asset, you must take steps to transfer the funds into a new account in the name of the trustee(s). Merely noting the transfer in your trust documentation will not suffice.

Waivers: We may delay enforcing our rights under this agreement without losing them. Any waiver by us shall not be deemed a waiver of other rights or of the same right at another time. You waive diligence, demand, presentment, protest and notice of every kind, except as otherwise set forth in the agreement.

Income Tax, Patriot Act and Other Rules: Federal laws require the Bank to obtain a taxpayer or, in some instances, another identification number for all of the owners of your account. The Bank must use your tax identification or evidence that you are exempt from obtaining such a number even if you are not required to file tax returns. Your identification number is also legally required as part of the due diligence we must perform under the Patriot Act. Your tax identification number is included on reports filed with the Internal Revenue Service concerning interest paid to you by the Bank. The Internal Revenue Service uses these numbers for identification purposes.

We are required to withhold 28% from each interest payment made to you on any account: (1) if you fail to provide us with the required certified information; (2) if the Internal Revenue Service instructs us to withhold; or (3) if the Internal Revenue Service instructs you that you are subject to backup withholding. We reserve the right to refuse to open any account for which you do not provide a certified TIN.

If you fail to provide your TIN and certify that you are not subject to backup withholding, or if the Internal Revenue Service notifies the bank that you have furnished an incorrect TIN, then federal tax rules require the Bank to withhold 28% of interest paid to you.

The Bank forwards withheld amounts to the Internal Revenue Service. You are entitled to treat these withheld amounts as prepayment of federal income taxes for estimated tax purposes and on your federal income tax return. If the amount withheld is greater than your tax liability, the IRS will refund the excess to you.

When an account earns $10 or more of interest in a year, or if backup withholding is imposed, the Bank will report the interest paid and the amount withheld to the Internal Revenue Service (and to the California Franchise Tax Board if your mailing address is in California). You will receive a copy of the information reported to the tax authorities.

The Internal Revenue Service can impose penalties dealing with taxpayer identification numbers and associated reporting and backup withholding requirements. These penalties include: a penalty for failing to furnish your taxpayer identification number unless that failure is due to reasonable cause and not willful neglect; a negligence penalty for failing to include any portion of an includable interest payment in gross income, unless there is clear and convincing evidence that the failure was not negligence; a civil penalty for supplying false information with no reasonable basis which results in no imposition of backup withholding; and criminal penalties for falsifying certifications or affirmations. These are penalties that may be imposed by the government, not by the Bank.

For additional information, contact your tax advisor or the Internal Revenue Service.

Questions or Problems: If you have a problem, first talk to your branch manager. If you can’t settle the problem this way, ask for the name and phone number of the appropriate administration officer to contact. If you can’t settle a complaint at the Bank, you can get assistance from a federal regulatory agency by contacting:

FDIC
25 Ecker Street, Suite 2300
San Francisco, CA 94105
(415) 546-0160
Consumer Affairs Division

Federal Reserve Bank of San Francisco
101 Market Street
P.O. Box 7702
San Francisco, CA 94120
(415) 974-2762

If you have any questions about Federal Reserve Board regulations, contact the Federal Reserve Bank at the address shown above.

CREDIT REPORTS & CREDIT SCORES

WHAT GOES INTO YOUR CREDIT REPORT… AND WHO USES IT?

What is a credit report?

A credit report is a summary of your financial reliability – for the most part, your history of paying debts and other bills. It is prepared by credit bureaus (also known as credit reporting agencies) primarily for use by lenders, employers and others who, under federal law, have a legitimate need for the information, such as when you apply for a loan, insurance policy, apartment or job. The wealth of information gathered by credit bureaus, coupled with the speed of today’s computer systems, explains why consumers can quickly get loans and other services.

What is in my credit report?

In general, your credit report has four parts:

• Identifying information.

• Public record information… gathered from local courthouses used to determine if you have previous defaults or legal judgments against you.

• Credit history information… such as a list of your credit cards and loans, and whether payments were on time.

• Inquiries… a section that lists the creditors or other parties that have requested your credit report.

How do credit bureaus get their information?

Lenders voluntarily supply the information to credit bureaus on an ongoing basis; no federal laws require companies to submit the data. Having access to current and reliable information about you helps lenders make informed decisions and offer you financial products and services more quickly.

How can I get a copy of my report?

Typically, there is no single credit report. Most likely, each of the three major credit bureaus that operate nationwide – Equifax, Experian and TransUnion – has a credit report on you. And because the credit bureaus may have different information and findings, many experts advise you to obtain your report from each.

The Fair and Accurate Credit Transactions Act (FACT Act) enables you to obtain a free copy of your credit report once a year from each of the three major credit bureaus (Equifax, Experian and TransUnion). For detailed information, contact the Federal Trade Commission (FTC) at www.ftc.gov.

How often should I get my credit report?

Many financial advisors suggest that you review your credit report once a year. It’s especially important to review your credit report before making a major purchase so you can correct an error before it slows down your credit approval or prevents you from getting the best possible loan terms.

What kinds of problems could I encounter?

While federal law requires lenders and other companies providing information to credit bureaus to give accurate information, mistakes do happen. So, when you look at your report:

• Make sure it accurately reflects how you have paid your bills. If you always pay your credit card and other loans on time, but your credit report erroneously shows late payments, you’ll want to correct that immediately.

• Verify that all the accounts listed are yours, especially if you have a common name or you share a name with a relative (such as John Doe, Jr.). You also want to be careful that an identity thief hasn’t opened new accounts in your name to commit financial fraud.

• Look for accounts you don’t use and may have forgotten. You may be able to raise your credit score by closing unnecessary credit card accounts. How do I correct wrong or incomplete information in my credit report?

How do I correct wrong or incomplete information in my credit report?

• Immediately tell the credit bureau, in writing. Federal law requires credit bureaus to investigate your complaint (generally within 30 days), send you a prompt response and correct any errors.

• Identify each item in your credit report that you dispute. State the facts and request a correction. The law also requires the source of inaccurate information to correct the  record at the credit bureaus.

• Send your letter by certified mail. Contact the company that provided the inaccurate or incomplete information and request a correction of its records, too. If a credit bureau’s investigation does not resolve your concerns, the law allows you to submit a brief statement about the matter that must be attached to your credit report and provided to anyone that accesses your report in the future.

What if I have a question or complaint involving a credit bureau?

First, try to resolve the matter with the credit bureau directly. If you are not satisfied, contact the FTC. The FTC does not resolve individual disputes, but it does provide useful information that may help consumers resolve their problems. Visit them at www.ftc.gov or call toll-free, 1-877-FTC-HELP (1-877-382-4357).

What is a Credit Score and why is it important?

A credit score is a number calculated by a credit bureau, a lender or another company for use in making a decision on a loan application or other product or service. Many lenders use a system developed by Fair Isaac and Company called the “FICO score.” Think of credit scoring as a point system based on your credit history, designed to help predict how likely you are to repay a loan or make payments on time. Everyone with a credit record also has a credit score. Different lenders may use different scoring systems, so your score may vary significantly from one source to another.

In general, the better your credit score the better your chances are of getting a loan with an attractive interest rate. So when it comes to getting a good loan, it’s important that your credit report – the basis for your credit score – is accurate, complete and in the best shape possible.

What are the most important factors in determining my credit score?

Typically, your credit score is most influenced by two factors: how you pay your debts and how much debt you owe. Late payments on loans, a past bankruptcy, debt collections or a court judgment ordering you to pay money as a result of a lawsuit will negatively affect your credit score.

Lenders want to be sure that the debt you owe is manageable. Lenders get concerned if you have a significant amount of debt compared to your income.

Other factors that can affect your credit score include how long you’ve used credit, how often you’ve applied for new credit and whether you’ve taken on new debt.

How can I get my credit scores?

Your scores, along with an explanation of how the score was derived, typically are available online for a fee. You may want to call or check the Web sites of any of the three major credit bureaus. Remember, your score may vary from one company to another.

Contact information:

Equifax – www.equifax.com (800) 685-1111

Experian – www.experian.com (888) 397-3742

TransUnion – www.transunion.com (800) 888-4213

Federal Trade Commission – www.ftc.gov (877) 382-4357

CHECK 21 POLICY

SUBSTITUTE CHECKS AND YOUR RIGHTS

What is a substitute check?

To make check processing faster, federal law permits banks to replace original checks with "substitute checks." These checks are similar in size to original checks with a slightly reduced image of the front and back of the original check. The front of a substitute check states: "This is a legal copy of your check. You can use it the same way you would use the original check." You may use a substitute check as proof of payment just like the original check.

Some or all of the checks that you receive back from us may be substitute checks. This notice describes rights you have when we return to you a substitute check that we have paid or created from an electronic image we have received from a collecting bank instead of returning your original check to you after it has been paid. Your rights regarding substitute checks do not apply when we have paid a check drawn against your account and presented to us in its original form (except for the addition of endorsements, routing information, etc.), unless we later convert such a check into a substitute check before we return it to you. The substitute check rules also do not apply to electronic debits charged to your account, although you have rights under other laws with respect to those transactions.

Reconverting Bank:

A reconverting bank is one that creates substitute checks itself, or one that accepts substitute checks for deposit from its customers and introduces these items into the check collection or return process. Because the process of creation or introduction of substitute checks into the check collection system is complicated and highly technical, you agree not to deposit any substitute check or electronic image of a check into your account unless you have entered into a separate agreement with us covering such checks.

Additional liability is created under Check 21 for any bank that introduces into the check collection or return process any item on which the necessary elements (name, account numbers, dates, amounts, signatures, endorsements, and the like) are not clearly legible when they are imaged or copied. Therefore, you must not write or deposit a check that is written in an ink type or color that does not reproduce clearly when imaged or copied.

Further, you may not write or deposit a check that bears designs, security features, or other elements that prevent the check from being imaged or copied with all of its necessary elements being reproduced clearly.

What are your rights regarding substitute checks?

In certain cases, federal law provides a special procedure that allows you to request a refund for losses you suffer if a substitute check is posted to your account (for example, if you think that we withdrew the wrong amount from your account or that we withdrew money from your account more than once for the same check). The losses you may attempt to recover under this procedure may include the amount that was withdrawn from your account and fees that were charged as a result of the withdrawal (for example, bounced check fees).

The amount of your refund under this procedure is limited to the amount of your loss or the amount of the substitute check, whichever is less. You also are entitled to interest on the amount of your refund if your account is an interest-bearing account. If your loss exceeds the amount of the substitute check, you may be able to recover additional amounts under other law.

If your account is used primarily for personal, family or household use and you use this procedure, you may receive up to $2,500 of your refund (plus interest if your account earns interest) within 10 business days after we received your claim and the remainder of your refund (plus interest if your account earns interest) not later than 45 calendar days after we received your claim.

We may reverse the refund (including any interest on the refund) if we later are able to demonstrate that the substitute check was correctly posted to your account.

How do you make a claim for a refund?

If you believe that you have suffered a loss relating to a substitute check that you received and that was posted to your account, please contact us at 866-869-MORE (6673). You must contact us within 40 calendar days of the date that we mailed (or otherwise delivered by a means to which you agreed) the substitute check in question or the account statement showing that the substitute check was posted to your account, whichever is later. We will extend this time period if you were not able to make a timely  claim because of extraordinary circumstances.

Your claim must be in writing and must include:

• A description of why you have suffered a loss (for example, you think the amount withdrawn was incorrect);

• An estimate of the amount of your loss;

• An explanation of why the substitute check you received is insufficient to confirm that you suffered a loss; and

• A copy of the substitute check [and/or] the following information to help us identify the substitute check: the check number, the date of the check, the name of the person to whom you wrote the check, the amount of the check.

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A Final Word: If you have any questions about any of the information contained in this publication, or about any of our many other services, please ask us for assistance. We look forward to answering your questions and concerns, and will be happy to supply you with additional information on these and other banking services.

05/08

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