Part I – Updated League Account Agreement Forms Released for Sale

NEWS:   INTRODUCTION [Notations in yellow added 11/15/2021]

• Your Account Agreement, with Arbitration Agreement (#83005, rev. 10/21), 14 pp., or
• Your Account Agreement (#83006, rev. 4/21), 12 pp.

• Account Ownership Agreement (#82024, rev. 6/21), 2 pp.
• Custodial Account Ownership Agreement (#81036, rev. 6/21), 2 pp.
• Business/Organization Account Ownership Agreement (#81057, rev. 6/21), 2 pp.

The forms are now updated in regard to both content and format. Please note that these final forms and instructions are not identical to the drafts exhibited in recent presentations.

There is no additional charge to credit unions that have paid their 2021 annual subscription fee for a particular form. Links to sample forms and instructions for each are provided below, under How to Obtain Forms. 

For your convenience, you may download a .pdf file of a complete set of sample copies of the five forms above, with the five form instructions and Parts I and II of this Compliance Courier. For more information on arbitration agreements and issues involved with use of Your Account Agreement, with Arbitration Agreement (#83005), please see this separate Compliance Courier Part II ‐ Updated League Account Agreement Forms Released for Sale.  

OVERVIEW OF USE OF UPDATED FORMS

Account agreement brochures

The 11 x 17-inch, 16-panel Your Account Agreement (#82004) brochure is now discontinued. It is replaced by the credit union’s choice of these new forms in two column, 8½ x 11-inch format:

• Your Account Agreement, with Arbitration Agreement (#83005, rev. 10/21), 14 pp., or
• Your Account Agreement (#83006, rev. 4/21), 12 pp.

The two new brochures above contain an identical Membership and Account Agreement, which is extensively updated from the old form #82004. The two new forms differ in that #83005 also contains a binding consumer arbitration agreement with a class action waiver and a jury trial waiver.

Your Account Agreement, with Arbitration Agreement (#83005) was developed because many credit unions are concerned about the threat of costly class action lawsuits. Institutions around the country and within our state have been sued relating to their overdraft protection, NSF fees, debt collection forms, etc. In addition to addressing any arguably deficient practices or disclosures that might give rise to disputes, some credit unions have turned to binding arbitration clauses and jury trial waivers in an effort to reduce the risks.

The binding arbitration agreement and waiver of jury trial that form #83005 offers would apply to consumers in regard to nearly all accounts that a consumer holds at the credit union. It does not apply to loans other than overdraft protection. The form gives accountholders a 30-day window after delivery of the arbitration agreement to opt out. The arbitration agreement applies only to consumers, not to businesses. 

Credit unions have the choice of whether or not to use The League’s arbitration agreement. Your Account Agreement (#83006) has the same account terms and conditions as #83005, but without an arbitration clause. Some credit unions may decide not to use an arbitration agreement at all at this time, or else choose to provide their own separate arbitration agreement (with different terms). Many credit unions use account forms offered by other vendors, with or without arbitration agreements.

Subscribing credit unions should discuss with their attorney whether to use an arbitration agreement for their services. If so, they should also discuss with their counsel whether The League’s arbitration agreement and jury trial waiver in #83005 meet their needs. If it does not, they could order Your Account Agreement (#83006), and supply their own, separate arbitration agreement.

Credit unions should use the same account agreement brochure form, #83005 or #83006, for all accounts. For example, if a credit union decides to use #83005, with the arbitration agreement for consumer accounts, it should use that form for business accounts as well, even though they are excluded from the arbitration agreement. That should simplify accurate recordkeeping and avoid any staff confusion, reducing the risk of errors.

Do not use the new #83005 or #83006 account agreement brochures with old signature cards. Please switch to The League’s updated (6/21) account ownership agreements. Older signature cards will not properly document the accountholder’s agreement to the terms of the new account agreement brochures.

It is important for credit unions to:

1. Deliver the account agreement brochure it has chosen, to the first-named owner on every existing account. This requires a mass mailing or electronic delivery but can be combined with a statement mailing. Carefully document the delivery; and
2. Deliver the account agreement brochure it has chosen, to the first-named owner on every new account suffix, at account opening.

Failure to deliver the form will result in the member not being bound by the terms and conditions or by any arbitration clause that was included. Failure to keep proper documentation will sacrifice the ability to prove that the member is bound by the terms and conditions, including any arbitration agreement.

If the credit union uses Your Account Agreement, with Arbitration Agreement (#83005), it must also keep accurate records of any opt-out notices it receives from members regarding the arbitration agreement.

Account agreement signature cards

The following WCUL Account Ownership Agreements (signature cards) have also been updated (rev. 6/21), largely to accommodate use of the new account agreement brochures above. They are expanded to two sides, with the IRS Taxpayer Identification Number (TIN) Certification shifted to the back. You must use the new signature card forms when using one of the new account agreement brochures (#83005 or #83006). These signature card account agreements are now available, each with their own instructions:

• Account Ownership Agreement (#82024, rev. 6/21), 2 pp.
• Custodial Account Ownership Agreement (#81036, rev. 6/21), 2 pp.
• Business/Organization Account Ownership Agreement (#81057, rev. 6/21), 2 pp.

HOW TO OBTAIN FORMS

League forms are only available in .pdf format, by annual subscription. Other than a few fillable fields, League forms are not customizable. Credit unions must review the forms to make their own determinations of whether the forms are suitable for their use, consistent with their own policies and procedures.  Accuracy is important. If any WCUL form is not suitable, the credit union should utilize the services of one of the national form companies that have some capability of customizing their forms.

Please review this Compliance Courier (Parts I and II), the sample form images, and the instructions before ordering your forms. Carefully consider whether to choose the account agreement brochure with the arbitration agreement clause (#83005) or without (#83006).

Links to samples of the individual forms and instructions are provided below. For your convenience, click on this link for a printable .pdf file of sample images of all five forms and instructions, as well as this two-part Compliance Courier. The instructions include further guidance beyond what is contained in this Compliance Courier. 

Account Ownership Agreement (#82024, rev. 6/21), 2 pp.

• Instructions.

Custodial Account Ownership Agreement (#81036, rev. 6/21), 2 pp.

• Instructions.

Business/Organization Account Ownership Agreement (#81057, rev. 6/21), 2 pp.

• Instructions.

Your Account Agreement, with Arbitration Agreement (#83005, rev. 10/21), 14 pp.

• Instructions, or

Your Account Agreement (#83006, rev. 4/21), 12 pp.

• Instructions.

Current subscriptions

Current subscribers to the now-updated account agreement forms will automatically receive most of the new versions in the coming weeks as part of their annual maintenance license agreement. The only exception is if you currently subscribe to the now discontinued WCUL #82004 Your Account Agreement brochure. You must let us know which version of the replacement account brochure forms you want – #83005 or #83006. We ask that one person from your credit union be designated to choose your new form here or send us an email indicating which one version of the new account agreement brochure forms you wish to license going forward. 

New subscriptions

Credit unions that are not currently subscribed to these forms may purchase them from The League online at theleague.coop > Solutions > Credit Union Forms. Please review this Compliance Courier, Purchasing League Forms 101, and the instructions on how to download new forms on the storefront page. To avoid errors, it is very important that you always make sure you are successfully logged into our website with your member credentials before attempting to make any purchase(s). Prices for each form are indicated in your shopping cart at the time of purchase.

For questions or issues with ordering the new forms on our website, please contact Jeff Bonk.

For questions about use of the forms, please call The League’s Compliance Hotline at (608) 640-4050 or email the Compliance Mailbox.

CHANGES TO THE FORMS

The following changes were made to the forms. Please see the particular form’s instructions for guidance on properly completing any form.

• Expanded form to two sides, shifting TIN certification to the back.
• Changed “Membership no.” to “Membership/base no.” to accommodate non-member accounts when permitted by law.
• Added “Non-Member Deposit Account” as an account type.
• Changed last sentence of “terms and conditions” to say:

• Included Your Account Agreement, with Arbitration Agreement in list of documents that may be acknowledged and agreed to by the accountholders.
• Added footnote to Your Account Agreement, with Arbitration Agreement, providing a capsule description of the arbitration agreement:

* PLEASE NOTE: The Arbitration Agreement, applicable to consumers, provides that disputes will be resolved by an arbitrator instead of a judge or jury (unless the dispute is excluded or relates to a transaction that cannot, by law, be subject to arbitration or you opt out) which means that YOU WILL NOT BE ABLE TO PARTICIPATE IN A CLASS ACTION. Arbitration procedures are simpler than court procedures, but many procedures permitted in court are limited or not available.   You may opt out for a limited time; see the Arbitration Agreement.

• Added “IRS” to heading for TIN Certification.
• Removed FATCA exemption line from TIN certification.
• Removed FATCA code space.
• Other shifting of text or blanks.

• Added “Business/” to beginning of form title.
• Changed “Party” label to “Account Owner.”
• Deleted “Club Share (Savings) Account” as an account type.
• Added space for “State of Registration” of an organization.
• Added “Single Member LLC” as a type of business/organization.
• Added footnote to LLC as type of organization, with this from IRS Form W-9:

* Limited liability company (other than single-member LLC). Enter the classification (C=C corporation, S=S corporation, P=Partnership): _______

NOTE: The current IRS Form W-9 includes this note, which is not provided on #81057:

Note: Check the appropriate box in the line above for the tax classification of the single-member owner. Do not check LLC if the LLC is classified as a single-member LLC that is disregarded from the owner unless the owner of the LLC is another LLC that is not disregarded from the owner for U.S. federal tax purposes. Otherwise, a single-member LLC that is disregarded from the owner should check the appropriate box for the tax classification of its owner.

• Added “(for sole proprietorship only)” to label for Payable on Death designation.
• Added “IF CHECKED,” to P.O.D. clause.

• Your Account Agreement, with Arbitration Agreement (#83005, rev. 10/21), Instructions, and
• Your Account Agreement (#83006, rev. 4/21), Instructions.

• It is not advisable to insert any personally identifiable information in the footers or other fillable spaces.
• Large blank fields are provided on pp. 1-3, which can be used for the credit union name, location, contact information, or other supplementary information. The spaces are not suitable for temporary information. These spaces are outside the body of the agreements that begin on page 4, so they are not suitable for additional agreement language.
• Small fields are provided in the footers, starting on page 2, for use as the credit union wishes. Possible uses may include revision date of the credit union’s own content and the date the credit union delivered the disclosure to the particular account holder.
• A small fillable field is provided on  page 11 for the credit union to reference, if it so desires,  a separate document or the space on page 12 describing any overdraft protection program.
• A larger fillable field is also available on page 12, which can be used to address any topic, space permitting, such as overdraft protection. This is preceded by a small field for a section heading in bold. A space is also provided in the Table of Contents to accommodate such a section heading.
• Spaces are provided on page 13 of Your Account Agreement, with Arbitration Agreement to allow for the credit union’s name and mailing address that should be used for arbitration agreement opt-out notification letters.

• Important information about opening a new Account
• State-chartered and federal credit unions
• General provisions
• Forms of Account ownership
• Account specifics
• Special provisions for funds transfers
• Special provisions for share draft (checking) Accounts

• The CFPB’s Reg. E (Electronic Fund Transfers) rule, including § 1005.17 – Requirements for overdraft services, relating to opt-in requirements for fees for paying an ATM or one-time debit card transaction.

  See ii Release No. 0120 – Electronic Fund Transfers for more about the rule.

Evidence of Mailing of Your Account Agreement or Your Account Agreement, with Arbitration Agreement

By signing one of The League’s Account Ownership Agreement signature cards, accountholders acknowledge receipt of and agree to the terms and conditions of specified agreements and disclosures, as well as any amendments that the credit union may make from time to time. The forms list such documents as the Your Account Agreement brochure as well as disclosures for Truth in Savings, Electronic Funds Transfers, Funds Availability, Privacy, etc. The newly updated signature cards add Your Account Agreement, with Arbitration Agreement to the list.  The credit union marks check boxes before the accountholder(s) sign to show which documents were provided.

In order to have accountholders bound by the terms and conditions of the newly updated Your Account Agreement, with Arbitration Agreement or Your Account Agreement, the credit union should mail or electronically deliver the document to all members via mail or E-Sign/UETA using sound and well-documented procedures. The goal is to have evidence to rebut claims that members did not receive the updated form so should not be bound by the new terms—including any arbitration agreement.

The Husch Blackwell law firm recommends that credit unions keep good records of the exact process of how and when it mailed the account agreement brochures. That is, the credit union should memorialize the process in writing and be sure it can confirm that the mailing was delivered to the post office.

If the credit union has a vendor undertaking the process, it would probably be prudent to obtain some sort of certificate of mailing from the person or persons that facilitated the actual mailing.

This would all help if someone claims they did not receive Your Account Agreement, with Arbitration Agreement or Your Account Agreement. In that case, the credit union can show the efforts it undertook, to convince the court that the Agreement was mailed to that person. If so, the presumption shifts to the person to provide evidence that s/he did not receive the mailing.

In one case, the Wisconsin Supreme Court found insufficient proof that an insurance notice was actually mailed to an affected individual:

[P]roof of the dictation of a letter, coupled only with proof of the custom of the office with reference to the mailing of letters, without any proof from which it may be inferred that in the particular instance the custom was complied with, does not constitute proof of mailing.  Frank v. Metropolitan Life Ins. Co., 227 Wis. 613 (1938).

In that case, the insurer produced only testimony from employees in its renewal department that a usual letter of nonrenewal directed to the plaintiff at his address was dictated and signed, placed in an envelope and given to the mail boy to take to the mail division to go out in the usual way. There was no testimony whatsoever by either the mail boy or any employee in the insurer’s mail division.

A Wisconsin Court of Appeals decision in the 1990s looked favorably on more detailed and specific recordkeeping for the mailing of notices:

In contrast, American Family carefully established through testimony as well as exhibits the custom and practice from generation to delivery to the post office. There was documentary evidence of generation of a notice to Millin on June 4, 1991, and again on July 16, 1991. There was also testimony and documentation from the mail processing supervisor describing the mailing process in great detail, including the method of comparing the count of generated notices with those prepared for mailing. She also identified the record showing the number of pieces mailed on the dates in question, together with the Madison post office stamp demonstrating its receipt of the first-class presorted mail and payment of postage on the dates in question. While it is true that the post office did not count or identify each piece of mail, we conclude that this record demonstrates adequate evidence of compliance with the insurer’s customary practice of giving the required notice to the policyholder so as to permit the issue to go to the jury.   

                                    Dykema v. Bendel, 197 Wis. 2d 956, 543 N.W.2d 868 (Ct. App. 1995).

The certificate of service could look something like that shown below (but should be varied and/or added to depending on the mailing process and advice noted above).

* * * * * * * * * * * * * * * * * * * *

CERTIFICATE OF SERVICE

I, [NAME], being first duly sworn on oath, depose and state that:

Accountholder Name
Accountholder Address

Accountholder Name
Accountholder Address

Accountholder Name
Accountholder Address
[Etc., constituting the complete list of accountholders to which the mailing was sent]

True and correct copies of _______________________ sent to the above-identified persons are appended to this Certificate of Service.

______________________________           _________________________
[SIGNATURE OF EMPLOYEE]                            [DATE]

__________________________                    _________________________
[PRINTED NAME OF EMPLOYEE]                    [TITLE]

State of: ___________________________

County of: _________________________

This document was SUBSCRIBED AND SWORN before me on [DATE] by [NAME OF EMPLOYEE]

__________________________________
[SIGNATURE OF NOTARY]                                               (NOTARY SEAL)

__________________________________
[PRINTED NAME OF NOTARY]

My commission expires: ______________.

* * * * * * * * * * * * * * * * * * * *

Similarly detailed documentation should be retained to regarding any electronic delivery of Your Account Agreement, with Arbitration Agreement or Your Account Agreement.

OVERDRAFT PROTECTION RESOURCES

Best Practices