Share Draft Checking Account Disclosure

I.

In this section the words "you" and "your" refer to the members who have signed a Share Draft Account application.

II.

1. We may decline to honor any draft or item drawn on your account whenever, at the time it is presented for payment, you do not have an unencumbered balance in your Share Draft Account of at least a corresponding amount of available funds. If and when we establish and implement one of the following plans, and if we have been previously authorized by you to do one or more of the following, we will either:
   1. Clear the overdraft by assessing your line of credit with us; or
   2. Clear the overdraft by a transfer of shares from your regular Share Account (but not more than 3 times per calendar month) for a fee as specified in the Service Fee Disclosure.
2. In the event any draft or item drawn on your Share Draft Account is not honored by us, as described in Paragraph II. a. above, you agree to pay us the fee which may be set from time to time for each draft or item which we do not honor. In the event your account becomes overdrawn for any reason and the account is referred to an attomey for collection, then in addition to any amounts due thereunder, including any applicable fees and charges, you agree to pay to the Credit Union all cost of collection and expenses, including reasonable attorney's fees.
3. We agree to provide notice to you of the overdraft (if preauthorized), the amount so used, and any fees and charges imposed. Such notice shall be contained in our periodic statement to you which shall be issued monthly for your Share Draft Account. If we have not implemented items IIa(l) or (2) and/or if you have not preauthorized us to cover the overdraft by a method other than above, your draft will be retumed, in which event your next periodic statement will nevertheless provide notice to you of the overdraft.
4. At our option, without any notice other than the said periodic statement, we may honor the draft and charge your Account so that you will be liable to us for the amount of the overdraft and any fees and charges incident thereto.
5. Unless you give us written notice of any errors in or exceptions to our periodic statement of your Share Draft Account on or before the twentieth (2Oth) day following the date the statement is mailed, such statement shall conclusively be presumed correct.

III.

It is understood and agreed that you will be authorized by us to withdraw shares from your Share Draft Account by means of a negotiable instrument (a 'draft" or "check") drawn on the Credit Union and that upon payment, we will then charge your account. A copy of this signed draft/check will be retained for a period of at least seven (7) years and will not be returned to you. Your periodic statement will constitute your record of transactions. Copies of cleared drafts are available for a fee as specified in the Service Fee Disclosure.

IV.

1. In the event you give us a stop-payment order and we, in good faith, follow our usual procedure for handling stop-payment orders, we shall be without liability and the amount of any item may nevertheless be charged to your Account, even though it has been paid or certified by us through inadvertence or oversight or misdescription.
2. Each request to stop payment of any item drawn against the Account shall be in writing. A written stop-payment order shall be in effect for six (6) months unless renewed in writing.
3. In connection with such stop-payment order you will promptly notify us if the item is recovered or destroyed or if for any other reason the stop payment order may be canceled or a replacement item is issued.

V.

You hereby assign all shares and deposits and payments and eamings on shares and deposits which you may have or may hereafter have whether held jointly or individually as security for such charges and other sums due us for any reason.

You also agree to comply with our rules and procedures for Share Draft Accounts, to use our forms and you agree that we need not honor payment instructions which are not in compliance with our normal practices.

VI.

You agree that we have the right to terminate your Account without notice at any time for just cause. You understand that sometimes in deciding if we should terminate your Account, we can consider many things, among which are the frequency with which you have overdrawn your account, your failure to pay amounts owed to us or to others, your past credit history and whether or not you have shares in your Regular Share Account.

VII.

You agree that

1. we may retain this Agreement in order to comply with any Federal, State, or local laws;
2. that, in compliance with applicable law, regulation and this Agreement, we may change the terms of this Agreement at any time by mailing notice of such amendment to you at your last known address as shown on our records and such amendment shall become effective 15 days after the date it is so mailed. You further agree that we may change your Share Draft Account to a Regular Share Account without your approval.

VIII.

1. You will not change or terminate our right and authority under this Agreement except by written notice signed by (each of) you. Such notice shall not affect transactions made prior to the time of the notice.
2. You will not pledge shares in your Share Draft Account as collateral or security for any loan.
3. We are under no obligation to pay a draft dated more than six (6) months prior to the date it is presented to us for payment.
4. Other than as a result of our negligence, we are not liable to you for any loss, damage or injury of any nature resulting from any action taken regarding the payment or nonpayment of a share draft.
5. You may not assign your rights under this Agreement to anyone else; however, this Agreement is assignable by us without notice to you and you agree to continue to be bound by the terms and conditions herein.
6. We can delay in enforcing our rights under this Agreement without losing them. We can accept late payments, checks or money orders marked "Paid in Full" or similar language without losing any of our rights under this Agreement.
7. This Agreement shall be governed by Maryland law, except where Federal law is applicable.