OPERATING RULES AND REGULATIONS

Transcription

1 OPERATING RULES AND REGULATIONS related information may be reproduced or transmitted in any form, by any means (electronic, photocopying, recording, or otherwise) without the prior written permission of CO-OP Financial Services. All Rights Reserved

2 CONTENTS 1. Definitions Definitions ATM Owner Duties & Responsibilities ATM Sharing Displaying CO-OP Network ATM Marks Types of Transactions Chaining Keyboard Requirement PIN Encryption PIN Verification Message Format Authorization of Transactions Receipt Requirement Cash Withdrawal Requirement Card Capture ATM and ATM System Availability Record Retention Cardholder Error Resolution Procedures Other Network Affiliation ATM Minimum Time-Out Requirement CO-OP Financial Services PIN Security Self Audit Monitoring and Maintenance of ATMs On CO-OP Network BIN Files Telecommunication Lines and Equipment ATM Downstream Processors Surcharging ATM ISO (Independent Sales Organization) Priority Routing Routing Requirements Cameras Liability of Participants Card Issuer Duties & Responsibilities Ownership and Confidentiality...27 related information may be reproduced or transmitted in any form, by any means (electronic, photocopying, recording, or otherwise) without the prior written permission of CO-OP Financial Services. All Rights Reserved REVISED 09/13 Page 2

3 3.2 Qualified Card Specifications PIN Issuance Magnetic Stripe/Chip/Embossed and Printing Information Other Network Affiliation Responsibilities To Cardholders ATM Transaction Types Deposit Limits Point-of-Sale Transaction Types Authorization Processor Stand-In Processing ATM Stand-In Limit Record Retention Cardholder Error Resolution Transaction Liability Downstream Processors Use of Network Transaction Routing Network Access Participant Third-Party Processors Liability of Participants Performance Standards Processing Performance Standards Liability of Participants Recommendations For Online Card Issuer Processing Back-Office Cycle Duties & Responsibilities of CO-OP Network Maintaining Switch Ownership and Confidentiality Security of Card Issuer Files Certification of Processors Telecommunication Lines and Equipment Training and Documentation Displaying CO-OP Network ATM Marks Availability of CO-OP Network Switch Settlement Process Duties & Responsibilities.41 related information may be reproduced or transmitted in any form, by any means (electronic, photocopying, recording, or otherwise) without the prior written permission of CO-OP Financial Services. All Rights Reserved REVISED 09/13 Page 3

4 6.1 Settlement Security Provision Fees and Charges Fees and Charges Invoice Policy & Fee Schedules 8.1 Telecommunications, Processing and Operational Charges Optional Network Fees and Charges Network Transaction Fees For Principal Members Network Transaction Fees For Network Access Members Signature Debit/Credit Card Processing - Card Issuer Only Product and Services Not Listed Grievance Procedures Resolution of Disputes Graphic Standards Deposit Processing Procedures Appointment of ATM Owner As Servicing Agent Removal of Deposits Processing Deposits Adjustments Notice of Return; Adjustments Card Issuer Collection Additional Documentation To Support Adjustments Audit Trails; Record Retention Compliance With Law Liability Delayed Availability of Funds Schedule of Fees For Deposit Processing Member Institutions Processing Adjustments, Chargebacks, Representments and Deposit Notifications Through CO-OP Financial Services Compliance Government Rules and Regulations 79 related information may be reproduced or transmitted in any form, by any means (electronic, photocopying, recording, or otherwise) without the prior written permission of CO-OP Financial Services. All Rights Reserved REVISED 09/13 Page 4

5 12.2 CO-OP Network ORRs National Credit Union Administration (NCUA) Compliance Indemnification & Limitation of Liability Early Termination Fee and Events of Default Early Termination Fee CO-OP Financial Services Rights Up on Default By Member Institution Determination of Early Termination Fee and Calculation De-Conversion Fee Fee Collection Remedies Miscellaneous Excused Performance Entire Agreement Assignment Severability Notices Authorization Continuing Obligations License To Use Copyrighted Materials Waivers Committees Operations Advisory Committee Claims Review Committee CO-OP Technology Committee..95 Appendix A. Exception Item Processing 97 Overview..97 Adjustment Processing.97 Chargeback Processing..103 Representment Processing Time Frames and Fees related information may be reproduced or transmitted in any form, by any means (electronic, photocopying, recording, or otherwise) without the prior written permission of CO-OP Financial Services. All Rights Reserved REVISED 09/13 Page 5

6 SECTION 1 Definitions Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

7 Section 1 DEFINITIONS DEFINITIONS The following words, in boldface type, shall have the meanings assigned, unless the context clearly requires some other meaning. 1.1 DEFINITIONS Account Acquirer Administrative Terminal System (ATS) Agreement Alphanumeric American National Standards Institute (ANSI) Application Identifier (AID) Asset ATM (Automated Teller Machine) ATM Owner Audit Trail (1) Credit established by deposit, from which withdrawals can be made, and into which deposits and inquiries can be made; or (2) A record of financial transactions dated and entered as debits or credits. An entity, typically a credit union that owns, operates, or controls Terminals that acquire Transactions requiring Authorization. An optional component of the Connex Systems on IBM and Tandem that allows Member Institutions to perform various administrative functions. An agreement executed by CO-OP Financial Services and another party whereby that party has an ongoing relationship with CO-OP Financial Services, some or all of which is subject to these ORRs, including but not limited to, a network license agreement executed by a Card Issuer, ATM Owner, Acquirer Processor or Third Party Processor. Consisting of numbers and alphabetic characters. It is also known as alphanumeric. See Character. A non-profit organization that develops standards for many industries. An identifier on the EMV card used to identify each of the available applications that are stored on the EMV card. Anything owned by a business or an individual that has commercial or exchange value, such as specific property or claims against others. Computer terminal activated by a magnetically encoded or chip card that permits Cardholders to make deposits, obtain cash from checking or savings accounts, pay bills, transfer funds between accounts and perform other routine transactions. Services may vary depending upon the de-termination of the Card Issuer or network. A party that owns, controls or operates an ATM. An ATM Owner may also be a Servicing Agent to receive and process deposits at designated ATMs under Section 11 of these ORRs. A detailed report that shows some or all of the messages that are processed through the system in one day. REVISED 8/16 Page 7

8 Section 1 DEFINITIONS Authorization Authorization Processor (AP) Auto Reconciliation (Auto Recon) ACH (Automated Clearing House) Adjustment Automated Deposit Reconciliation System Available Balance The approval or rejection of a transaction by or on behalf of the Card Issuer. An optional module of the Connex Systems on Tandem or IBM that performs some or all of the authorization typically performed by a Card Issuer's host computer. AP may verify the Cardholder's PIN, status (whether or not on negative file) daily limit, and/or account balance. See Host Authorization, Stand-In Processing, and Stand-Alone Authorization. An Offline system that provides a comparison of the value of a transaction between CO-OP Network and optional external networks through which the transaction is routed. Computer-based clearing and settlement facility for exchange of electronic debits and credits among financial institutions. An exception item initiated by the Acquirer to correct an error in the processing of a transaction or previously processed exception item. A system used to automate the deposit processing for ATMs. Current balance, less deposits not yet posted to account. Bankruptcy Code The informal name for title 11 or the United States Code (11 U.S.C ), the federal bankruptcy law. BIN Business Day Captured Card Card Card Base Card Issuer Cardholder Cardholder Processor (CP) Card Validation Method Character Bank Identification Number, usually the first four or six digits of the personal account number (PAN). The BIN identifies the Card Issuer and is used to route an EFT transaction properly. It is sometimes known as the ISO number. The day that CO OP Financial Services is open for its usual and customary business. A card that is retained during usage. An encoded piece of plastic that activates terminals. These cards are prepared and encoded according to ISO standards, ensuring that they are recognized throughout the networks. A business grouping of cards for which transactions are to be routed in the same manner for authorization. The PANs of these cards begin with the same prefix, part of which is the BIN. A credit union or other credit union entity which issues cards to its members or customers directly or through another Servicing Agent and has executed an Agreement and has agreed to be bound by the terms of the Agreement with CO-OP Network or similar agreements as a Card Issuer. A person able to access an account with a card issued by a Card Issuer. An online interface that authorizes Cardholder transactions. Method used to verify that the card being used belongs to the Cardholder. Consisting of letters, digits, and special symbols. See Alphanumeric. REVISED 8/16 Page 8

9 Section 1 DEFINITIONS Chargeback Clearing Clearing House Chip Common U.S. Debit AID Companion Device Comvelopes CO-OP Financial Services CO-OP Network CO-OP Network ATM Transaction Credit Credit Card Credit Union Credit Union Business Day A transaction returned to the Acquirer, initiated by the Card Issuer. This can be all or a portion of the disputed transaction. Movement of checks from financial institutions where they are deposited back to those on which they were written and funds movement in the opposite direction. This results in credit to the financial institution where funds are deposited and corresponding debits to the accounts of the paying institutions. Central collections site where financial institutions exchange checks with one another. An electric component embedded on a card that contains processing or memory data to perform a CO-OP Network transaction. AID that is owned by a global card brand, but can be licensed by a debit network. Allows online PIN, no CVM only as CV options and is used by Acquirers to route to any network who has licensed the Common AID. A device that accompanies a card issued to a Cardholder including a supplemental access device that is issued by the Issuer, and a mobile device for which the Issuer has enabled mobile payments by provisioning the required information to a secure element or secure database or another device. A unique method of securely distributing randomly generated PIN encryption key components required for ATM activation, via a tamperevident PIN mailer. Doing business as CU Cooperative Systems Inc. Doing business as CU Cooperative Systems, Inc. CO-OP Network refers to the system of ATM Acquirers, and Card Issuers who have signed agreements with CU Cooperative Systems, Inc. It includes the gateway access, which CO-OP Network provides to other regional, national and international ATM/POS networks. A transaction initiated by a Cardholder of a Card Issuer under the Network License Agreement of CO-OP Network. 1. (Banking) An advance of cash or some commodity in exchange for a promise to pay a certain amount (the advance plus interest) in the future. 2. (Accounting) The positive balance or amount remaining in an account, or the deduction of a payment made from an amount due. See Debit. A plastic card issued to a Cardholder for making purchases and/or for obtaining cash against a credit account. A financial institution that is a Processing or Network Access participant that is a Card Issuer and may also be an ATM Owner. CO-OP Network is created by and for the benefit of credit unions, but credit union Participants that convert to a non-credit union charter type are allowed to remain a Participant (at the discretion of CO-OP Network), and therefore, the term credit union includes such financial institutions. The day that the credit union is open for its usual and customary business. REVISED 8/16 Page 9

10 Section 1 DEFINITIONS CU Cooperative Systems, Inc. Database DataNavigator Debit Debit Card Default Direct-Attached Dual Control Electronic Funds Transfer (EFT) Emergency Rules EMV EMVCo Encryption Endpoint Evidence of Dual Control External Network Extranet Federal Bank Secrecy Act Fidelity Information Services (FIS) Foreign Deposit Legal, corporate name for CO-OP Network and CO-OP Financial Services. One or more related files. The application that includes but not limited to transaction research, exception management, ATM management, settlement and reporting functions in one central location. An item of debt in an account. Any posted amount that increases the balance of an asset or expense account or decreases the balance of a liability account. See Credit. A type of plastic card issued by a Card Issuer that allows Cardholders to access their accounts through ATMs or POS devices and their DDA accounts via the Visa or MasterCard Network. A value that is automatically assigned if the user does not specify a value. Terminals attached directly to the switch, as opposed to an internal or external control unit. See Controller-Attached. Separation of responsibilities requiring two persons to be present in order to accomplish a task, e.g., open an ATM, load cash, remove captured cards, process deposits, etc. See Evidence of Dual Control. Transfer of funds between accounts by electronic means. Rules that may relate to time-sensitive issues and that are practical and necessary given the severity of the circumstances creating the emergency. Specifications developed by Europay, MasterCard and Visa that ensure EMV cards and terminals operate successfully together. The EMV organization that sets the standards for security, communication and formatting of EMV cards. The process of scrambling data to protect it from unauthorized access. The final destination for routing. Two signatures or sets of initials or video indicating that two people were present during dual control. See Dual Control. A network other than CO-OP Network. See Network. A communications and information organization tool that provides all member credit union data in one central location. The Currency and Foreign Transactions Reporting Act of 1970 (which legislative framework is commonly referred to as the Bank Secrecy Act or BSA ) requires U.S. financial institutions to assist U.S. government agencies to detect and prevent money laundering. The Switch provider operating under contract with CO-OP Network. Deposit made by members or customers of a Card Issuer at an ATM other than an ATM owned or operated by the Card Issuer. REVISED 8/16 Page 10

11 Section 1 DEFINITIONS Gateway Header Record Hot Card Ineligible Deposit Intercept Processor ISO Issuer Key Key Management Kiosk Limit Mark Member Institution Negative/Exception File Negative Status A Switch that allows members of regional networks access to other regional and/or national networks, but does not allow the national networks or other regional networks access to each other except through the gateway endpoint. A record that precedes other records and contains data about the subsequent records. A card that cannot be honored for payment, most often because the card has been reported lost or stolen or has been canceled by the Issuer; it is on the negative file and therefore cannot be used. Any items deposited to an ATM made payable in foreign (non-u.s.) currency, drawn on an institution or other person located outside the United States, photocopies, certificates of deposit, returned or canceled checks or drafts and any non-negotiable writings such as check stubs, IOUs and the like, are ineligible deposits. A Processor that intercepts and processes all of its own (On-us) items while the foreign transactions are forwarded to the switch for authorization. See Processor. Independent Sales Organization. A non-financial institution group or individual that may do one of the following: 1. Supply ATMS or POS equipment to financial institutions and/or merchants. 2. Own and/or deploys ATM s and/or merchant POS equipment on behalf of their own organization or company. An entity that issues cards and provides for the authorization of its Cardholders' transactions, either by performing its own processing or by purchasing the services of a Cardholder authorization service or a Processor. An Issuer is also known as a Cardholder processor. A parameter used by an encryption algorithm. The process of maintaining and/or changing encryption keys. A standalone structure or device, and accompanying hardware and software, that connects to the CO-OP Network switch and that may provide information or services on a computer screen that may include, in addition to standard ATM services, certain other financial or consumer services; or the structure that surrounds a freestanding ATM. The maximum recorded amount and usage allowed on a card. Service marks, e.g. logos, taglines etc. A Processing or Network Access credit union, ISO, service organization or other participant in CO-OP Network. A file maintained at the system that contains records of cards for which activity is prohibited or limited. The status of a card which is prohibited or limited. REVISED 8/16 Page 11

12 Section 1 DEFINITIONS Network Network Access Offline Off-Premise ATM Online On-Premise ATM On-Us ORRs PIN PIN Validation Plastic Point of Sale (POS) POS Balance Primary Account Number (PAN) Processing Participant Processor Reg B Reg C Reg CC Reg D As the context shall suggest or require: 1. All members associated with an EFT System; 2. A computer and all the devices attached to it; 3. CO-OP Network unless otherwise indicated. See External Network. A credit union who contracts directly with CO-OP Network via a license agreement for CO-OP Network access only. 1. Not connected to the computer, either because the unit can function without the computer or because the computer is down; 2. Not operating in real time; 3. AP-Authorization Processor. Any ATM other than an On-Premise ATM. 1. Connected to the computer; under the control of the CPU; 2. Operating in real time; 3. Host processor connected to switch and authorizing own transactions. An ATM located on or within 500 feet of the premises of a branch location of the ATM Owner. A transaction occurring at a credit union's own ATM by its own Cardholder. CO-OP Network Operating Rules and Regulations. An identification number that is known only to the Cardholder and is typically four digits. The Cardholder uses the PIN with their card to access an ATM or POS device. The process of checking a PIN for correctness. There are many different methods of PIN validation. See Card. Location at a Merchant establishment where the consumer pays for purchases of goods or services. The balance available to the cardholder for Point of Sale transactions. A number that identifies the individual Cardholder at the credit union. A credit union who contracts directly with CO-OP Financial Services via a license agreement, and switches transactions through CO-OP Financial Services as primary gateway. An entity that communicates with the system and performs debit and/or credit processing and/or authorizing for itself and/or other credit unions and/or sends transactions elsewhere for authorizing. See Authorization Processor, Intercept Processor, Issuer and/or Third Party Processor. Regulation B - Equal Credit Opportunity Act. Regulation C - Home Mortgage Disclosure Act. Regulation CC - Availability of Funds and Collection of Checks. Regulation D - Reserve requirements of depository institutions. REVISED 8/16 Page 12

13 Section 1 DEFINITIONS Reg E Reg Z Representment Restrictive Endorsement Servicing Agent Settlement Shared Deposit Network Program Split Knowledge Stand-In Limits Stand-In Processing Switch Terminal Third Party Processor Token BIN Token PAN Token Service Provider (TSP) Regulation E - The Federal Reserve Board's set of regulations governing EFT transactions. Regulation Z - Truth in Lending Act. A return of a previous chargeback initiated by an Acquirer. An endorsement limiting payment to a particular person or otherwise prohibiting further transfer or negotiation of the instrument. Performs an ATM settlement task (including deposit processing settlement) on behalf of a credit union and conforms to the ORRs. A daily procedure that adjusts the financial position of each member of an EFT network according to the transactions. Allows members to make account deposits at ATMs of other network program members. The process of one piece of information divided between two or more people so that one person cannot obtain the information in its entirety. The limits mandated by the networks for certain transactions when the Card Issuer is Offline. The network's method of performing authorizations on behalf of a Cardholder Processor when their system is unavailable. It is also known as delay processing. The highly advanced computer hardware and software operated under the control of CO-OP Financial Services for the purpose of transmitting items and messages to and from credit unions and networks. A device used by a customer to access EFT services. An entity which provides processing services to credit unions, but does not itself constitute a network. A unique BIN assigned for use with a Token PAN that associates back to the original BIN. Payment token that is a numeric substitute for a primary PAN and can be processed by all participants in the payment system. Payment tokens associate back to the original PAN providing the Card Issuer with the full transaction detail. A token service provider that may provide a number of services such as the following: 1. Issuer enrollment 2. Authorization protocols 3. Token request service (provisioning), providing an entity the ability to request a token 4. Mapping of tokens to PAN and storing in the secure vault 5. Token/PAN exchange to the Card Issuer when a token transaction occurs 6. Life cycle management of the tokens REVISED 8/16 Page 13

14 Section 1 DEFINITIONS Tokenization Tokenization Services Triple DES The process of replacing the traditional card account number (PAN) with a unique digital token in online and mobile transactions. Tokens can be restricted for transactions with a specific mobile device, merchant or transaction type. Services provided by CO-OP Network related to a CO-OP Network transaction initiated with a Token PAN. 1. Communicates with a Token Service Provider (TSP) on behalf of the Card Issuer to obtain the true funding PAN; 2. Handles the true PAN, the Token PAN and additional token data in accordance with these ORRs for the purpose of processing such CO-OP Network transactions and all associated exception items as well as associated reports and data filters. A three-step encryption process using a double-length (16-byte) key to encrypt the data before it is sent to or received from the ATM or Processor. REVISED 8/16 Page 14

15 SECTION 2 ATM OWNER DUTIES AND RESPONSIBILITIES Operating Rules and Regulations Copyright 2015 CO-OP Financial Services without the prior written permission of CO-OP Financial Services. All Rights Reserved

16 Section 2 ATM OWNER DUTIES AND RESPONSIBILITIES ATM OWNER DUTIES & RESPONSIBILITIES ATM, Kiosk and other EFT-related Device (collectively ATM) Owners shall have the following responsibilities: 2.1 ATM SHARING A. Except as determined by CO-OP Financial Services in its sole discretion, only CO-OP Network Member Institution owned, operated or controlled ATMs may participate in CO-OP Network and those ATMs that are owned, operated or controlled by CO-OP Network Member Institutions that participate in a shared network must participate in CO-OP Network. All Shared Branch transactions conducted at an ATM that are acquired and processed within the CO-OP Network are subject to Shared Branch Rules and Regulations of the applicable shared branch network and are not governed by these ORRs. B. Each ATM Owner shall cause its shared ATMs to be operated in such a manner that all such ATMs accept all qualified cards that comply with Section 3 of these ORRs. C. ATM Owner shall execute an agreement with CO-OP Financial Services and shall provide in writing to CO-OP Financial Services the location, together with related supplementary data required by CO-OP Financial Services, for each ATM owned or operated by the ATM Owner to participate in CO-OP Network. ATM Owner will be responsible for informing CO-OP Financial Services of any such updated information related to each ATM. Each ATM participating in CO-OP Network shall have, at a minimum, the functional capabilities as specified in these ORRs. The ATM Owner shall make all of its ATMs, which are generally available for public access, available to CO-OP Network users, unless the ATM is exempted by written agreement from CO-OP Financial Services, in its sole discretion. D. The ATM Owner shall provide advance written notice to CO-OP Financial Services of any change in the services at its ATMs at least ten (10) Credit Union Business Days prior to the effective date of the change. E. CO-OP Financial Services will make a reasonable effort to update its public records with the change in services available at ATMs. The removal, addition, or modification of service provided by an ATM is generally within the control of the ATM Owner and CO-OP Financial Services is neither responsible nor liable to a Card Issuer or the ATM users for the discontinuance or modification of an ATM service at any particular location. F. If a Card Issuer, now or during the term of the Agreement, owns or controls an ATM which receives On-Us (Card Issuer's) deposits, and is accessible by the public or is in a shared environment, the Card Issuer agrees that the ATM shall receive CO-OP Network deposits. An exception may be granted, by CO-OP Financial Services in its sole discretion if the Card Issuer does not participate in the CO-OP Network shared deposit environment, and the Card Issuer s Cardholders do not have deposit access at any CO-OP Network ATMs. All provisions under the Agreement and in these ORRs related to an ATM Owner are applicable to the Card Issuer who participates as an ATM Owner in the shared deposit environment. Copyright 2015 CO-OP Financial Services REVISED 12/15 Page 15

17 Section 2 ATM OWNER DUTIES AND RESPONSIBILITIES G. An ATM Owner may submit a written request to exclude a specific device from CO-OP Network Deposit Program when both of the following reasons apply: 1. Restricted area; and 2. Device does not accept On-Us deposits. H. If a Member Institution is not an Issuer in CO-OP Network Deposit Program, participation is optional as an Acquirer; however, if the credit union participates in any shared deposit network, participation in CO-OP Network Deposit Program is mandatory. I. By October 1, 2017, each ATM equipped with a Chip reading device that meets the applicable EMVCo compliance standards, must be capable of initiating a CO-OP Network transaction by reading the Common U.S. Debit AID from a Chip if: 1. Such Application Identifier (AID) is present; and 2. Such CO-OP Network ATM is capable of processing, through another debit network, transactions initiated in the U.S. with a Chip. By October 1, 2017, ATM Terminals that are not equipped with a Chip reading device are liable for CO-OP Network ATM transactions that are disputed as counterfeit fraud if the CO-OP Card is embedded with a Chip. 2.2 DISPLAYING CO-OP NETWORK ATM MARKS Each ATM Owner shall display CO-OP Network ATM Marks on its ATMs in accordance with CO-OP Network Graphic Standards within forty-five (45) Credit Union Business Days of the ATM Owner's live date in CO-OP Network. A. The CO-OP Network brand mark must be at least the same size and no less prominent than any other brand mark on the terminal, with the exception of the proprietary mark of the Member Institution itself. B. The CO-OP Network brand mark may be located in more than one location on the machines as needed to identify the capabilities of the machine (e.g. deposit-taking, check imaging) and Network. CO-OP Financial Services recommends using all available ATM signage to identify each capability of the terminal to the cardholder. C. It is recommended that the CO-OP Network brand mark be placed at the upper-left position in horizontal signage and the top-left position in vertical signage. If this position is occupied by the Member Institution s brand mark, then it is recommended that the CO-OP Network brand mark is to be placed in the next prominent position. D. All CO-OP Network brand marks and signage must be removed from all ATM terminals within fifteen (15) calendar days of termination/resignation in CO-OP Network. 2.3 TYPES OF TRANSACTIONS Each ATM Owner shall ensure that its ATMs are capable of processing the following transactions for CO-OP Network Card Issuers: A. Deposits to share and share draft accounts; B. Cash withdrawals from share, share draft and credit accounts; C. Balance inquiries to share, share draft and credit accounts; Copyright 2015 CO-OP Financial Services REVISED 12/15 Page 16

18 Section 2 ATM OWNER DUTIES AND RESPONSIBILITIES D. Transfers to and from share and share draft accounts; and E. Reversals. ATM Owners who, as Card Issuers, are processing On-Us Transactions at their ATMs for their own members, may provide a unique set of transactions.2.4 CHAINING Each ATM Owner shall ensure in instances where a Cardholder requests more than one transaction, that either the card is retained by the terminal until completion of the final transaction (insertion type card reader), or a separate PIN entry is required for each transaction. 2.5 KEYBOARD REQUIREMENT Each ATM Owner shall ensure that its ATMs have an alphanumeric PIN keyboard that complies with ANSI specifications. Each ATM must be capable of allowing entry of PINs having four (4) to twelve (12) characters. 2.6 PIN ENCRYPTION Each ATM Owner shall ensure the following with respect to processing CO-OP Network transactions. Each PIN, after entry into an ATM, must be encrypted using Triple DES technology in accordance with the CO-OP Network Triple DES mandate issued February Initial PIN encryption must be performed within a secure hardware device without the use of software at the ATM. The PIN must always remain encrypted until it reaches CO-OP Network, and any translation of the PIN by the Terminal Processor, including any translation at the Terminal Processor's host computer, must be performed within a secure hardware device, without the use of software. All keys by which PINs are encrypted must be generated in a secure manner and management of encryption keys must meet the standards as set by the American National Standards Institute; ANSI X ; X and X At a minimum, all encryption keys must be subject to Dual Control and Split Knowledge. If there is a known or suspected compromise of an encryption key, internal escalation procedures must be followed and the encryption key must immediately be changed. An ATM Owner is responsible to maintain its ATM encryption keys in a secure manner that is consistent with dual control and Split Knowledge. A unique encryption key per device is required. PINs must be encrypted with unique keys and that dynamic key exchange must be implemented between processing nodes, assuring that zone working keys are used for no more than one processing day. This adds to the operating life span of a Data Encryption Algorithm by increasing the cryptographic robustness of the algorithm. The Data Encryption Algorithm is a secret key, symmetric encryption method that uses the same secret 56-bit key to encrypt and decrypt a message. 2.7 PIN VERIFICATION Each ATM Owner Shall Ensure That Each ATM equipped with a Chip reading device that it owns, operates, controls or sponsors is operated in such a way that a CO-OP Network Transaction initiated with a Chip card must use online PIN as its Card Validation Method. 2.8 MESSAGE FORMAT Copyright 2015 CO-OP Financial Services REVISED 12/15 Page 17

19 Section 2 ATM OWNER DUTIES AND RESPONSIBILITIES Each ATM and ATM system must be capable of transmitting messages in the format as specified in CO-OP Network technical specifications. 2.9 AUTHORIZATION OF TRANSACTIONS All ATMs and ATM systems shall be operated in such a way that no network transaction may be effected without receiving authorization from the Card Issuer or receiving authorization from CO-OP Network (using established authorization parameters) RECEIPT REQUIREMENT A. It shall be the ATM Owner's responsibility and not the Card Issuer (if different from the ATM Owner) or CO-OP Network to ensure that each ATM, upon completion of an authorized transaction on CO-OP Network involving a cash withdrawal, deposit or other electronic funds transfer, makes available to the Cardholder a receipt that complies fully with all applicable state and federal laws and regulations, including, but not limited to, Reg E for Debit products and Reg Z for Credit products and includes, but is not limited to, the following information: 1. The amount of the transaction; and, if a surcharge applies, the amount dispensed to the Cardholder; 2. The transaction date; 3. The type of transaction; 4. The type of account accessed; 5. Include only the last four digits of the primary account number (PAN), replacing all preceding digits with fill characters such as x, *, or # (do not use blanks or non numeric characters); 6. The ATM location or Terminal ID at which the transaction was initiated; 7. The trace number (if available); 8. The transaction time; 9. The remaining balance in the account accessed, if such balance information is provided by the Card Issuer; 10. The amount of any surcharge levied on or paid by the Cardholder must be listed as a separate item and labeled using the word Fee preceded by an acronym or other label identifying the ATM Owner levying the surcharge, and 11. Any other information required under applicable federal, state or local laws, rules or regulations. B. Provided federal, state, and local laws, rules and regulations permit, the ATM may allow Cardholders the option of not receiving the receipt required under this section. If the ATM is unable to provide a receipt at any time, the ATM must display an on-screen notice that the ATM is temporarily unable to provide a receipt and provide the option of canceling the transaction CASH WITHDRAWAL REQUIREMENT Each ATM must be capable of dispensing at least $ cash per transaction. Copyright 2015 CO-OP Financial Services REVISED 12/15 Page 18

20 Section 2 ATM OWNER DUTIES AND RESPONSIBILITIES 2.12 CARD CAPTURE CO-OP Network ATMs are not required to capture CO-OP Network cards. ATM Owners are not required to notify Card Issuers of the capture of a CO-OP Network card. In the event of a CO-OP Network card capture at a CO-OP Network On-Premise ATM due to a machine malfunction or due to a member neglecting to remove the card, the ATM Owner shall hold the card for one (1) Credit Union Business Day. Card may be returned to Cardholder with two (2) forms of proper ID. If the card is captured due to a Card Issuer request, the ATM Owner should cut the card in half through the magnetic stripe and Chip if present and dispose of it the same day. In the event of a CO-OP Network card capture at a CO-OP Network Off-Premise ATM for any reason, the ATM Owner should cut the card in half through the magnetic stripe and Chip if present and dispose of it the same day. Any ATM Owner that captures a card that appears counterfeit (e.g. plain white plastic card, cardboard card or any other card that is unusual in nature) may, at their option, retain, preserve and release to appropriate law enforcement authorities such card for possible use as evidence in prosecuting any action arising from its use. Care should be exercised in handling any suspected counterfeit card to prevent fingerprints or any other physical evidence from being destroyed. All other networks captured cards shall be returned in accordance with the current rules, regulations and procedures established by that network ATM AND ATM SYSTEM AVAILABILITY A. Each ATM Owner shall ensure that its ATMs have scheduled operating hours, at a minimum, from 06:00:00 to 24:00:00 (midnight) local time and that its ATMs and ATM system meet the minimum performance standards established by CO-OP Network. An ATM Owner may provide shorter operating hours, if it believes such shorter operating hours are necessary as a matter of security and safety and must promptly notify CO-OP Financial Services of the change. B. It shall be the ATM Owner's responsibility and not the Card Issuer (if different from the ATM Owner) or CO-OP Financial Services to comply with all federal, state and local laws that apply to ATM safety, security and handicap access, including without limitation, the Americans with Disabilities Act RECORD RETENTION Each ATM Owner shall maintain a record of each network transaction communicated to or by it for a minimum of two (2) years or as is required by applicable federal, state, or local law, rule, or regulation. (Direct-attached ATMs connected to CO-OP Network meet this requirement). Each ATM Owner shall maintain sufficient audit trails with respect to deposits received to be able to provide pertinent information to the appropriate Card Issuer (if participating in the shared deposit program) and to match returned items with the original deposit. Random annual compliance audits may be performed. Applicable fines may be assessed for noncompliance. (See 2.26) Copyright 2015 CO-OP Financial Services REVISED 12/15 Page 19

21 Section 2 ATM OWNER DUTIES AND RESPONSIBILITIES 2.15 CARDHOLDER ERROR RESOLUTION PROCEDURES The ATM Owner shall fully cooperate with CO-OP Network and the Card Issuer in the resolution of all Cardholder disputes and Adjustments in accordance with the procedures outlined in these ORRs. All Adjustments and Representments initiated by a CO-OP Network ATM Owner for transactions occurring between CO-OP Network participants must be processed via DataNavigator. ATM Owners that fail to comply may be held liable for any loss OTHER NETWORK AFFILIATION The ATM Owner participating in regional and/or national networks must provide the transaction types at its ATM as required for each network and abide by the operating rules and regulations set forth by each network ATM MINIMUM TIME-OUT REQUIREMENT ATM Owners must allow CO-OP Network a minimum of forty (40) seconds before timing-out the transaction CO-OP FINANCIAL SERVICES PIN SECURITY SELF AUDIT Each ATM Owner is responsible for ensuring that the ATMs and the systems under their direct control, and any third party they engage to service the ATMs, are in full compliance with the applicable standards set forth in guidelines for Financial Services X9/ TR-39 TG , Retail Financial Services Compliance Guideline Part 1: PIN Security and Key Management. A. Direct-Attached 1. Each ATM owner shall, on or before December 31 of each even numbered year, at its expense, complete and submit the CO-OP Financial Services PIN Security Self Audit, respondent information, and all applicable Compliance Exception Reporting forms including all required signatures and submit completed forms to CO-OP Financial Services. 2. The PIN Security Self Audit may be performed by a staff member or auditor of the credit union that does not have operational responsibility for the areas under review. If the credit union chooses to use an external auditor, they are required to be knowledgeable in ANSI Standards X9.8 and X9.24 for Retail Encryption. The designated auditing staff of each ATM owner is required to keep all data associated with the most recent PIN Security Self Audit, for a period of three (3) years and make this information available upon request. B. Intercept Processors ATMs 1. Each ATM owner shall, on or before December 31 of each even numbered year, at its expense, complete and submit the PIN Security Self Audit, respondent information, and all applicable Compliance Exception Reporting forms including all required signatures. 2. The PIN Security Self Audit must be performed by an auditor knowledgeable in ANSI Standards X9.8 and X9.24 for Retail Encryption. If the audit is performed by an internal auditor, they cannot have operational responsibility for the areas under review. Copyright 2015 CO-OP Financial Services REVISED 12/15 Page 20

22 Section 2 ATM OWNER DUTIES AND RESPONSIBILITIES 3. The designated auditing staff of each ATM owner is required to keep all data associated with the most recent PIN Security Self Audit, for a period of three (3) years and make this information available upon request MONITORING AND MAINTENANCE OF ATMS ON CO-OP NETWORK A. Direct-Attached The ATM Owner's ATMs, modems and the telecommunication lines attached to CO-OP Network will be monitored in accordance with CO-OP Network procedures for the purpose of determining the status and functionality of each ATM. It is understood that such monitoring shall be done twenty-four (24) hours a day, seven (7) days a week. CO-OP Financial Services shall use its best efforts to contact and inform the ATM Owner of any problems detected in the ATMs or modems and of extended telecommunications line outages in accordance with the normal procedures of CO-OP Network. 1. The ATM Owner will maintain all of its ATMs. The ATM Owner's maintenance services shall include, but not be limited to balancing ATMs on a regular basis, replenishing all cash and supplies and providing preventive and remedial ATM and/or site maintenance. 2. True dial up ATMs (e.g. Triton, Tidel, Diebold CSP 100 & 200, etc.) are only in communication with the Switch when a transaction is initiated. Due to this type of ATM hardware limitation, these ATMs are not monitored by CO-OP Network for errors, which include, but are not limited to, hardware faults, cash errors or communication errors. It is the ATM Owner s responsibility to ensure that this type of ATM is available and able to process transactions per Section 2.12 of the CO-OP Network ORRs. B. Intercept Processor ATMs 1. The ATM Owner operating as an Intercept Processor is responsible for its own modems and telecommunication lines. It is recommended that such monitoring should be performed during the operating hours of the ATMs. ATMs excepted from public access are not subject to this rule. The ATM Owner will notify CO-OP Financial Services of any problems with an ATM and will also notify CO-OP Financial Services if the ATM will be unavailable for more than twentyfour (24) hours. 2. The ATM Owner will maintain all of its ATMs. The ATM Owner's maintenance services shall include, but not be limited to, replenishing all cash and supplies and providing preventive and remedial ATM maintenance and site maintenance. CO-OP Financial Services and the Card Issuer (if different from the ATM Owner) shall have no responsibility in this regard BIN FILES It is the responsibility of all participating Intercept Processors, Third Party Processors and ATM ISOs to load and maintain the CO-OP Network BIN files on a weekly basis to ensure that CO-OP Network transactions are processed in accordance with routing and surcharging requirements. (See Sections 2.1 and 2.23). BIN files are made available at each Tuesday morning by 10:00 AM, Pacific Time and must be loaded no later than the end of the current credit union business week. A. Domestic BIN File. This file contains all BINs that participate in CO-OP Network on a nonsurcharge basis. This file is only for use by Intercept Processors who route all foreign (not On-Us) transactions to CO-OP Network. B. CO-OP BIN File. This BIN file contains all CO-OP Network participating BINs. These BINs must be routed surcharge free to CO-OP Network for processing. Copyright 2015 CO-OP Financial Services REVISED 12/15 Page 21

23 Section 2 ATM OWNER DUTIES AND RESPONSIBILITIES C. Credit Card BIN File. This BIN file contains credit cards issued by CO-OP Network participants. Transactions are not routed to CO-OP Network, but should be routed surcharge free. D. International BIN File. This BIN file contains all Plus, Cirrus, Visa and MasterCard international BINs. Intercept Processors who route all foreign (not On-Us) transactions to CO-OP Network must load this BIN File and route surcharge free TELECOMMUNICATION LINES AND EQUIPMENT The ATM Owner shall pay for all telecommunication charges, including equipment charges, between their ATMs, host computer, administrative terminal, if any, and the Switch. CO-OP Financial Services will invoice the ATM Owner for such telecommunication charges. The ATM Owner shall pay for all charges relating to the installation and use of telephone lines, modems and other telecommunication equipment referred to above. Any equipment lease shall be coterminous with CO-OP Network agreement unless otherwise specifically indicated ATM DOWNSTREAM PROCESSORS No more than two (2) Processors, the Processor that drives the ATM and the Processor that is directly connected to the Switch, may process CO-OP Network ATM transactions between an ATM terminal and the Switch SURCHARGING Processing Participant and Network Access Member Institutions may elect to surcharge for transactions performed at their ATMs. However, CO-OP Financial Services requires that a Processing Participant or Network Access Member Institution NOT impose surcharge fees on the members of another Processing Participant or Network Access Member Institution. In the event the ATM Owner elects to surcharge transactions other than CO-OP Network transactions, it is the responsibility of the ATM Owner to understand, implement, and comply with the network(s) requirements regarding surcharging as specified in the applicable network(s) operating rules. ATM Owners that intend to surcharge transactions other than CO-OP Network transactions must adhere to the following requirements: A. Notification of Intent to Surcharge The terminal owner who elects to surcharge shall notify CO-OP Financial Services in writing no less than ninety (90) calendar days prior to implementing the surcharge fee. Within the written notification, the terminal owner shall identify the location of the terminal(s) that will add a surcharge by providing the following information: 1. Terminal number; 2. Descriptive location; 3. Street address; 4. City, state, and zip code; and 5. Date surcharging is to begin. The terminal owner must submit to CO-OP Financial Services for approval no less than ninety (90) calendar days prior to implementing the surcharge fee the following information: 1. Copies of on-screen notice; Copyright 2015 CO-OP Financial Services REVISED 12/15 Page 22

24 Section 2 ATM OWNER DUTIES AND RESPONSIBILITIES 2. Copies of receipt layout; and 3. A completed copy of all applicable affiliated network forms. B. Transactions Eligible for Surcharge Surcharge fees imposed by ATM Owners may be collected on the following transactions only: 1. Cash withdrawals. 2. Purchases of non-cash media (stamps, traveler s cheques, etc.). 3. Deposits. C. Surcharge Amount/Non-Discrimination Application of a surcharge at an ATM must be non-discriminatory. The amount of surcharge imposed on the transaction of any financial institution not belonging to CO-OP Network (Processing Participant or Network Access) must be no less favorable than the amount imposed on the transaction of any other financial institution not belonging to CO-OP Network (Processing Participant or Network Access) performed at the same ATM. The exception to the non-discrimination rule is Electronic Benefit Transfer (EBT) transactions. A CO-OP Network ATM Owner that has elected to surcharge transactions performed by non CO-OP Network financial institution Cardholders may choose to NOT surcharge Electronic Benefit Transfer (EBT) transactions while surcharging all other non CO-OP Network financial institution Cardholder transactions subject to federal, state, and local laws. D. Reversals Any reversal of a transaction in which a surcharge was imposed must also fully reverse the surcharge. If a surcharge is a fixed amount, but only a portion of the funds for the transaction are dispensed, the ATM Owner may choose not to reverse the surcharge. E. ATM Screen Requirements Before a surcharge may be imposed, the Cardholder must be given on-screen notification that clearly states the following information: 1. Name of the institution to which the surcharge is being paid; 2. Exact amount of the surcharge; 3. Option to continue or cancel the transaction; and 4. Explanation that if the Cardholder continues the transaction, they will be charged the fee; if the Cardholder cancels the transaction, they will not be charged a fee. A two (2) pass message format is required if hardware is capable. F. Receipt Requirements (See Section 2.9). G. Audit Record Requirement Each ATM must record, separately on its audit record, any surcharge imposed at such ATM. Copyright 2015 CO-OP Financial Services REVISED 12/15 Page 23

25 Section 2 ATM OWNER DUTIES AND RESPONSIBILITIES 2.24 ATM ISO (INDEPENDENT SALES ORGANIZATION) An ISO is a person or entity, other than a CO-OP Network credit union, that enters into an agreement with a merchant (or business owner) on behalf of a CO-OP Network credit union to accept ATM transactions at a merchant s location. These ATMs are subject to all rules in this chapter including sharing, priority routing, and downstream processing PRIORITY ROUTING All transactions, without exception, initiated by a Cardholder of a CO-OP Network credit union at an ATM owned, controlled, or operated by another member of CO-OP Network must be routed exclusively through the Switch ROUTING REQUIREMENTS Prior to initiating a transaction using a Chip, each ATM Owner that owns, operates, controls or sponsors a CO-OP Network ATM equipped with a Chip reading device, must perform the following: 1. Cause each such CO-OP ATM s Chip reader to prioritize selection of the Common U.S. Debit AID, if such AID is present, above any other AID on the Chip. 2. Route transactions initiated using such Chip in accordance with the Issuer Card Duties and Responsibilities (See Section 3.18) CAMERAS Cameras are not required at CO-OP Network ATM locations. If an ATM Owner does have cameras, pictures obtained with such cameras with respect to a disputed transaction shall be provided upon a Card Issuer s request within seven (7) Credit Union Business Days of receipt of the request. Such pictures shall be provided and used at the sole expense of the requesting Card Issuer. Fees for providing such pictures shall be established by mutual agreement of the two (2) parties but shall not exceed $75.00 per picture LIABILITY OF PARTICIPANTS Failure to comply with the rules and requirements as set forth in these ORRs will result in an assessed fine of up to $5,000 per incident and/or termination from CO-OP Financial Services. Each day on which there is a failure to comply with these ORRs is a separate incident for purposes of this paragraph. Copyright 2015 CO-OP Financial Services REVISED 12/15 Page 24

26 SECTION 3 CARD ISSUER DUTIES & RESPONSIBILITIES Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

27 Section 3 CARD ISSUER DUTIES & RESPONSIBILITIES CARD ISSUER DUTIES & RESPONSIBILITIES Card Issuers shall have the following responsibilities in addition to those responsibilities applicable under Section 2 hereof where the Card Issuer may also be an ATM Owner. NOTE: CO-OP Network PIN POS Service transactions must adhere to Star Network Operating Rules. 3.1 OWNERSHIP AND CONFIDENTIALITY Card Issuers understand and agree that the computer programs and CO-OP Network supported files and data bases (excluding the Card Issuer Files as defined herein) made available by CO-OP Network as part of the services, are the exclusive and confidential property of CO-OP Financial Services or the third parties from whom CO-OP Financial Services has secured the right to use such computer programs and CO-OP Network supported files and data bases. The Card Issuer shall treat as confidential and will not disclose or otherwise make available any CO-OP Network services, trade secrets, processes, proprietary data, information or documentation related thereto (collectively the "Confidential Information"), in any form, to any person other than employees of the Card Issuer. The Card Issuer shall instruct its employees who have access to CO-OP Network services and the Confidential Information to keep the same confidential by using the same care and discretion the Card Issuer uses with respect to its own confidential property and trade secrets. Upon termination of the agreement with CO-OP Network for any reason, the Card Issuer shall return to CO-OP Financial Services any and all copies of CO-OP Network products and the Confidential Information, which are in its possession. Card Issuers are required to sign a confidentiality agreement with CO-OP Financial Services. 3.2 QUALIFIED CARD SPECIFICATIONS Within twenty-four (24) months from the executed Agreement date, the Card Issuer is responsible for the CO-OP Network logo Mark appearing on all cards excluding Credit Cards, which serve as access devices to CO-OP Network. The logo Mark shall be displayed as specified in the CO-OP Network Graphic Standards. No Card Issuer shall permit the CO-OP Network logo Mark to appear on any plastic card unless the Card Issuer issues the card and complies with all other terms and conditions of these ORRs pertaining to the use of the CO-OP Network logo Mark. Each Chip embedded on a plastic card or a Companion Device issued by the Credit Union must be personalized with a U.S. Debit AID. 3.3 PIN ISSUANCE Each Card Issuer shall ensure that each of its Cardholders has a PIN, which shall consist of four (4) to twelve (12) characters. REVISED 9/17 Page 27

28 Section 3 CARD ISSUER DUTIES & RESPONSIBILITIES 3.4 MAGNETIC STRIPE/CHIP/EMBOSSEDND PRINTING INFORMATION A. Requirements Each plastic card that has a magnetic stripe and Chip shall be usable in all standard magnetic stripe and Chip card reading devices and shall meet the following requirements: 1. Have a card number, within which number shall be information uniquely identifying the Card Issuer pursuant to the International Standards Organization (ISO) standards, a six (6) digit number, or bank identification number (BIN) as defined by Visa or MasterCard; 2. The Primary Account Number (PAN) associated with each card to be processed within the shared network will be the principal field utilized for routing transactions to Cardholder Processors for authorization and transaction processing. The primary account number can be up to 19 digits in length (16 or 19 digit PANs are preferable). All digits will be numeric. The card must be embossed or printed with the complete PAN; 3. The PAN will include the ISO number of the Card Issuer and the individual account number of the member. The PAN must contain a transposition check digit, which may be used to verify the accuracy of information during transmission of EFT transactions; 4. Have an expiration date, which shall specify an actual date after which date the card shall cease to be valid, such date being a date later than the date of the issuance of the card. The expiration date must be encoded as "yymm". Two (2) to three (3) years are recommended. 5. Cards with magnetic stripes must be encoded with both Track 1 and Track 2. B. Embossed/Printing PAN and Signature Panel Each plastic card shall also have the PAN fully embossed or printed on the face of the card and shall contain a signature panel on the back of the card. It is recommended that the member's full name and an expiration date be embossed or printed on the face of the plastic card. C. Exceptions A Card Issuer which currently has plastic cards not conforming to ISO standards and does not have the PAN fully embossed or printed on the face of the card or signature panel on the back of the card, will have twenty-four (24) months from the date the agreement was executed to conform its cards. D. Card Format All plastic cards shall conform to the ISO and applicable EMVCo compliance standards for embossing or printing and type of plastic as well as any other standards and specifications provided in this section. REVISED 9/17 Page 28

29 Section 3 CARD ISSUER DUTIES & RESPONSIBILITIES E. Point-of-Sale Participation A Card Issuer joining CO-OP Network participating in the on-line POS program(s) offered by CO-OP Network, or by its regional network of choice, must abide by the following: 1. The applicable regional network will stand in for CO-OP Network in the event CO-OP Network is unavailable. The Issuer must comply with minimum daily stand-in limits as prescribed by the regional POS network. 2. Authorization Processor; The daily and stand-in POS limit per Cardholder may or may not be combined with the ATM daily limit and may not be less than $250 for purchases and/or $100 for cash back. Testing and certification may be required; 3. Cardholder/Intercept Processors; The daily and stand-in POS limit per Cardholder may not be less than $250 for purchases and/or $100 for cash back. Testing and certification may be required. Other information: PIN length is variable between four (4) and twelve (12) digits long. Transposition Check Digit is calculated by using the Mod 10 check digit (2-1-2) method. 4. The Card Issuer must abide by the ORRs of their POS Programs of which the Card Issuer is a member. F. Tokenization Participation A Card Issuer shall ensure that its authorization system performs the following: A. Performs authorization in accordance with the technical specifications for each transaction initiated with a Token PAN containing a Token BIN assigned to such Card Issuer; B. Is capable of receiving the true PAN in an authorization request provided, however, that it may elect to receive the Token PAN in addition to the true PAN. Each Card Issuer that participates in Tokenization authorizes CO-OP Financial Services at CO-OP s discretion, to communicate on behalf of such Card Issuer with such Card Issuer s Token Service Provider (TSP) for the purpose of performing functions related to such program. G. Plastic Cards Without CO-OP Network Logo Mark A Card Issuer with existing plastic cards will have twenty-four (24) months from the date the agreement was executed to display the CO-OP Network logo mark on the back of the plastic card, excluding Credit Cards. H. Algorithm Supported The Switch supports DES and Diebold PIN Algorithms. Each credit union is responsible to maintain its PIN Validation key. If this key is lost, the cards issued by the credit union may have to be reissued. I. Chip Issuance and Participation A Card Issuer shall issue CO-OP Network cards, and may, at its option, issue a Companion Device for each such CO-OP Network card. Each CO-OP Network card or Companion Device may, at the Issuer s option, have an embedded Chip that meets the applicable EMVCo compliance standards, unless otherwise approved by CO-OP Financial Services. CO-OP Network cards must support the REVISED 9/17 Page 29

30 Section 3 CARD ISSUER DUTIES & RESPONSIBILITIES CO-OP Network transactions as set forth in these ORRs and must be able to access all CO-OP Network ATMs. 3.5 OTHER NETWORK AFFILIATION A Card Issuer participating in regional and/or national networks must support the transactions set for each network and abide by the ORRs set forth by each network. If a Member Institution not an Issuer in CO-OP Network Deposit Program, participation is optional as an Acquirer; however, if the Member Institution participates in any Shared Deposit Network Program, participation in CO-OP Network Deposit Program is mandatory. 3.6 RESPONSIBILITIES TO CARDHOLDERS Each Card Issuer shall fully comply with all applicable federal, state and local laws, rules, and regulations, including, but not limited to, those requiring initial disclosure and periodic reporting statements to its Cardholders. Such compliance shall not be the responsibility of CO-OP Network. Further, except as otherwise stated herein, such compliance shall not be the responsibility of another ATM Owner. A Card Issuer shall use and shall instruct Cardholders to use CO-OP Network in accordance with these ORRs, as may be modified from time to time, and in accordance with any other materials furnished by CO-OP Financial Services to the Card Issuer. A Card Issuer is solely responsible for the consequence of any instructions it may give Cardholders who use credit union ATMs, the ATMs of any other financial institution and the ATMs of CO-OP Network or any third party through which CO-OP Network may be obtained. A Card Issuer is also responsible for the consequence of the Cardholder's failure to properly access CO-OP Network in the manner prescribed by CO-OP Network or for the Cardholder's failure to supply accurate input information. 3.7 ATM TRANSACTION TYPES Each Card Issuer must certify that its host processor is capable of processing any or all of the following ATM types of transactions for CO-OP Network: A. Envelope, Non Envelope, Cash and Check Deposits to share and share draft and other accounts; B. Cash withdrawals from share, share draft, credit and other accounts; C. Balance inquiries to share, share draft, credit and other accounts; D. Transfers to and from share, share draft and other accounts; and E. Reversals. Each Card Issuer must be capable of processing a CO-OP Network transaction initiated by reading the Common U.S. Debit AID from a Chip if such AID is present and such Card Issuer is capable of processing, through another network, transaction initiated with a Chip. Card Issuers shall not transmit any positive Available Balance or POS Balance that includes amounts available through an overdraft protection program, other than a line of credit that is subject to Reg Z (12 C.F.R. Part 226), in response to an Authorization request for a balance inquiry or for any other purpose. If a Card Issuer authorizes transactions on the basis of funds available through an overdraft protection program, other than a line of credit that is subject to Reg Z (12 C.F.R. Part 226), the Card Issuer must appropriately disclose to its Cardholders that (i) it may authorize and complete transactions by drawing on the overdraft protection program, and (ii) the access account balance it provides in connection with transactions does not include amounts available through an overdraft program. Card Issuers may make such disclosures through a method outside the network (e.g., account terms and conditions). REVISED 9/17 Page 30

31 Section 3 CARD ISSUER DUTIES & RESPONSIBILITIES 3.8 DEPOSIT LIMITS Card Issuers participating in the CO-OP Network Deposit Program are responsible to determine the maximum dollar amount allowable for deposits made by their Cardholders to a CO-OP Network ATM. REVISED 9/17 Page 31

32 Section 3 CARD ISSUER DUTIES & RESPONSIBILITIES 3.9 POINT-OF-SALE TRANSACTION TYPES A. Each Card Issuer shall ensure that it is capable of electronically processing POS transactions involving purchase of goods and services and reversal of such transactions. B. POS transactions shall be supported and accessed through a transaction account as defined by Reg D. C. The following POS transactions are allowed: 1. Purchase from funding; 2. Purchase with cash back excluding Credit Card transactions; 3. Balance inquiries excluding Credit Card transactions; 4. Pre-authorization and pre-authorization completion. No pre-authorization completion amount may exceed the authorized amount; 5. Partial approval with purchase, excluding Credit Card transactions; 6. Cash only without the purchase of goods or services; and 7. Merchandise correction to funding AUTHORIZATION PROCESSOR Each Authorization Processor shall operate in accordance with the standards established by CO-OP Network STAND-IN PROCESSING Stand-in Processing by CO-OP Network on behalf of the Card Issuer/Intercept Processor will be mandatory for all ATM and POS transactions. All Cardholder Processors must support online Negative Status messages in support of stand-in Authorization ATM STAND-IN LIMIT The daily stand-in limit for ATM transactions for Cardholder Processor/Intercept Processor on CO-OP Network will be a minimum of $ RECORD RETENTION Each Card Issuer shall maintain a record of each ATM or POS transaction received for a minimum of two (2) years or as is required by applicable federal, state or local law, rule or regulation. REVISED 9/17 Page 32

33 Section 3 CARD ISSUER DUTIES & RESPONSIBILITIES 3.14 CARDHOLDER ERROR RESOLUTION It shall be the Card Issuer's responsibility to comply with Reg E (Reg Z for Credit) in addressing and resolving Cardholder errors in accordance with procedures set forth for CO-OP Network or Adjustment procedures defined by other networks accessed. Except as otherwise set forth herein, although ATM Owners shall not be responsible for Reg E (Reg Z for Credit) compliance, ATM Owners shall cooperate in full and in a timely manner with Card Issuers in addressing and resolving Cardholder errors. All Chargebacks initiated by a CO-OP Network Card Issuer for transactions occurring between CO-OP Network participants must be processed via DataNavigator. Card Issuers that fail to comply may be held liable for any loss TRANSACTION LIABILITY Effective October 1, 2017, no Card Issuer shall be liable for a CO-OP Network transaction initiated at a CO- OP Network ATM if: 1. Such ATM is not equipped with a Chip reading device that complies with the requirements (See Section 2.1.I.); 2. Such plastic card or Companion Device has an embedded Chip capable of initiating a CO-OP Network ATM transaction; and 3. Such transaction is later disputed as counterfeit fraud DOWNSTREAM PROCESSORS No more than two (2) Processors, the Third Party Processor that is directly connected to the Switch and the credit union host processor may process/authorize card transactions acquired at CO-OP Network ATMs USE OF NETWORK Card Issuer shall not, except as otherwise expressly permitted by CO-OP Financial Services in writing, sell, lease or otherwise provide, directly or indirectly, any of the CO-OP Network services or any portion thereof to any third party, except permitting the use of CO-OP Network by Cardholders and customers of other institutions licensed to use CO-OP Network. Card Issuer shall not make any alteration, change or modification to any of the computer programs and/or files and data bases (except the Card Issuer's files as defined in Section 5.2, hereof) made available by CO-OP Network to Card Issuer as part of CO-OP Network without prior written consent in each instance which may be withheld at the sole discretion of CO-OP Financial Services. Card Issuer shall process all transactions including processing member PIN-based transactions through CO-OP Network with the exception of Intercept Processor On-Us transactions and acquired transactions bound for a non CO-OP Network entity TRANSACTION ROUTING A. Priority Routing All transactions, without exception, initiated by a Cardholder of a CO-OP Network credit union at an ATM owned, controlled, or operated by another member of CO-OP Network must be routed exclusively through the CO-OP Network Switch. B. PIN-based Transactions REVISED 9/17 Page 33

34 Section 3 CARD ISSUER DUTIES & RESPONSIBILITIES Any and all BINs associated with the credit union must be processed and routed exclusively through the CO-OP Network Switch for PIN-based transactions (i.e., PAVD, Maestro, etc.) NETWORK ACCESS PARTICIPANT Credit unions who wish to connect to CO-OP Network via a Third Party Processor are Network Access participants, and sign a CO-OP Financial Services Agreement or other agreement as may be designated by The Third Party Processor must link directly to the Switch and route all CO-OP Network transactions to the Switch, including, but not limited to, CO-OP Network PIN POS Service THIRD-PARTY PROCESSORS Switch will settle funds and fees for CO-OP Network credit unions behind Third Party Processors. The settling agent must be approved by CO-OP Network. Adjustment processing must be accomplished in accordance with CO-OP Network standard procedures in order to control the impact of all CO-OP Network members LIABILITY OF PARTICIPANTS Failure to comply with the rules and requirements as set forth in these ORRs will result in an assessed fine of up to $5, per incident and/or termination from CO-OP Network. Each day on which there is a failure to comply with the ORRs is a separate incident for purposes of this paragraph. REVISED 9/17 Page 34

35 SECTION 4 PERFORMANCE STANDARDS Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

36 Section 4 PERFORMANCE STANDARDS PERFORMANCE STANDARDS 4.1 PROCESSING PERFORMANCE STANDARDS CO-OP Network requires two (2) performance standards for Card Issuers processing on CO-OP Network. The first is the Processor Online Authorization Processing Rate and the second is the Card Issuer Approval Rate of transactions being authorized Online and Offline at the Switch. The performance standards are as follows: Processor Online Authorization Processing Rate - 97% Card Issuer Approval Rate - 85% The Processor Online Authorization Processing Rate is calculated by the total number of transactions authorized by the Online Processor, divided by the total number of base transactions of that Processor. (Base transactions equal total transactions, minus Acquirer Switch stand-in and CO-OP Network Switch edit transactions). The Card Issuer Approval Rate is calculated by the number of approved transactions, divided by the total number of base transactions. 4.2 LIABILITY OF PARTCIPANTS A Card Issuer processing Online must comply with both the Processor Online Authorization Processing Rate and the Card Issuer Approval Rate. A Card Issuer processing Offline must comply with the Card Issuer Approval Rate. The following fines will be assessed for non-performance: A. CO-OP Financial Services shall give a warning to the Card Issuer following the first occurrence of the Card Issuer's failure to meet any applicable processing performance standards. B. CO-OP Financial Services shall give an additional warning notice to the Card Issuer following the second consecutive occurrence of the Card Issuer's failure to meet any applicable processing performance standards. C. The Card Issuer shall be assessed a penalty of $500 for the third consecutive occurrence of the Card Issuer's failure to meet any applicable processing performance standards and for each such occurrence thereafter. NOTE: Waivers will be issued to Card Issuers for a period not to exceed six (6) months following the first notice for failure to correct system problems. If problems have not been resolved, penalties will be imposed based on the criteria set forth in Section RECOMMENDATIONS FOR ONLINE CARD ISSUER PROCESSING BACK-OFFICE CYCLE CO-OP Financial Services advises that fewer transactions will require stand-in authorization at the Switch if the Online Card Issuer schedules its Back-Office cycle after 20:00:00 Pacific Time. REVISED 09/13 Page 35

37 SECTION 5 DUTIES & RESPONSIBILITIES OF CO-OP NETWORK Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

38 Section 5 DUTIES & RESPONSIBILITIES OF CO-OP NETWORK DUTIES & RESPONSIBILITIES OF CO-OP NETWORK CO-OP Network shall have the following responsibilities to the ATM Owners and Card Issuers, as applicable: 5.1 MAINTAINING SWITCH CO-OP Financial Services shall be responsible for maintaining the Switch, and will coordinate all communication links and data sets between the Cardholder Processor, Intercept Processor, Authorization Processor systems, ATM interfaces, regional and national networks, and gateway systems to other networks. 5.2 OWNERSHIP AND CONFIDENTIALITY All Card Issuer database files, terminal handler files and Cardholder authorization files provided by the Card Issuer, or the customers of the Card Issuer, to CO-OP Network and all reports delivered by CO-OP Network to the Card Issuer (collectively the "Card Issuer files") shall remain the exclusive and confidential property of the Card Issuer. Card Issuer files shall be treated as confidential and shall not be disclosed or otherwise made available to any person other than the Card Issuer, and employees, agents and consultants of CO-OP Financial Services. CO-OP Financial Services will instruct CO-OP Financial Services employees, agents and consultants who have access to such Card Issuer files to keep the Card Issuer files confidential by using the same care and discretion which CO-OP Financial Services uses with respect to its confidential property. Notwithstanding the foregoing, CO-OP Financial Services may reveal certain limited information, as permitted by applicable law, regarding CO-OP Network transactions to law enforcement authorities, private investigators, or fraud monitoring entities solely to assist such parties in identifying fraudulent CO-OP Network transactions. This information may include, for example, transaction amount, time, location and PAN. Any information supplied by CO-OP Financial Services shall be limited to information that does not, in itself, identify a specific Cardholder. 5.3 SECURITY OF CARD ISSUER FILES A. CO-OP Financial Services will use its best efforts to provide reasonable security provisions to ensure that access to the Card Issuer files is available only to the Card Issuer. CO-OP Financial Services reserves the right to issue and change rules, regulations and procedures to improve file security. If a change in security procedures affects the access to services, the Card Issuer will be notified at least thirty (30) calendar days prior to the change. B. CO-OP Financial Services will use its best efforts to take reasonable precautions to prevent the loss of or alteration to Card Issuer files retained by CO-OP Financial Services, but CO-OP Financial Services cannot guarantee against any such loss or alteration. Accordingly, the Card Issuer must keep copies of the information delivered to CO-OP Financial Services for reconstruction of lost or altered Card Issuer files to the extent deemed necessary by the Card Issuer. REVISED 09/13 Page 37

39 Section 5 DUTIES & RESPONSIBILITIES OF CO-OP NETWORK C. At the Card Issuer's request, CO-OP Financial Services will provide the Card Issuer, in CO-OP Network standard format and at the standard rates of CO-OP Financial Services for such format, any and all requested Card Issuer files. 1. If a Card Issuer requests transaction data in order to aid in resolving an error and it is determined that there was no error by CO-OP Financial Services or its associated entities, the Card Issuer shall pay the then prevailing archival retrieval charges in connection with the requested data. If there was an error by CO-OP Financial Services or its associated entities, there will be no retrieval charge for the requested data. 2. CO-OP Financial Services does not have any responsibility in assisting the Card Issuer in resolving any disputed transactions that are brought to the attention of CO-OP Financial Services more than one hundred twenty (120) calendar days after the alleged error occurred. D. CO-OP Financial Services shall dispose of all Card Issuer files in any manner deemed appropriate by CO-OP Financial Services unless the Card Issuer, at least six (6) months prior to such disposal, furnishes to CO-OP Financial Services written instructions for the disposition of such Card Issuer files, which disposition shall be at the Card Issuer's expense. CO-OP Financial Services will, without such notice from the Card Issuer, dispose of Card Issuer files in accordance with the time frames set forth in these ORRs. 5.4 CERTIFICATION OF PROCESSORS CO-OP Financial Services shall be responsible for certifying Authorization Processors, Cardholder Processors, and Intercept Processors pursuant to CO-OP Network specifications. 5.5 TELECOMMUNICATION LINES AND EQUIPMENT A. CO-OP Financial Services is responsible for the installation of appropriate telecommunication lines and modems to enable the ATM Owner and CO-OP Network switch-driven ATMs to access the Network services and to enable the Card Issuer's host computer and administrative terminal, if applicable, to access an ATM Network. B. CO-OP Financial Services will use its best efforts to provide the Card Issuers and ATM Owners with reasonable assistance in trying to resolve any problems related to the telephone lines and communications equipment used between any ATM, host computer, administrative terminal and Switch. CO-OP Financial Services shall not be responsible for the reliability or continued availability of any of the telephone lines and communications equipment used in connection with the services. REVISED 09/13 Page 38

40 Section 5 DUTIES & RESPONSIBILITIES OF CO-OP NETWORK 5.6 TRAINING AND DOCUMENTATION A. At the Card Issuer's or ATM Owner's option, training may be provided at CO-OP Financial Services training facility or at the Card Issuer's or ATM Owner's facility. Additional training sessions shall be held at training facilities selected by CO-OP Financial Services on a scheduled basis at the then prevailing charges for such training by CO-OP Financial Services. The Card Issuer or ATM Owner, as appropriate, shall be responsible for all travel and out-of-pocket expenses incurred by its employees in attending any training sessions. B. CO-OP Financial Services will use its best efforts to make available to the Card Issuer or ATM Owner, copies of marketing and training materials related to the services. 5.7 DISPLAYING CO-OP NETWORK ATM MARKS A. CO-OP Financial Services will provide credit unions with decals identifying the terminal as part of CO-OP Network prior to live date. B. CO-OP Financial Services will provide credit unions with a brand mark identifying the terminal as deposit-taking, if such terminals are deposit-taking. 5.8 AVAILABILITY OF CO-OP NETWORK SWITCH CO-OP Financial Services shall have no liability to any Cardholder, Card Issuer, ATM Owner, or POS merchant Processor for the non-operation of the Switch by reason of any natural disaster, earthquakes, epidemics, terrorist acts, wars, weather, fire, strikes, riots, acts of God, power failure, telecommunications outage or other failures, interruptions or errors not directly caused by CO-OP Financial Services. In addition, if any federal, state, or local law, regulation, judicial decision, or formal or informal administrative determination restricts or adversely affects the ability of CO-OP Financial Services to carry out its obligations under these ORRs or any of its Agreements, it may, as of the effective date of such law, regulation, or determination, cease its operations or modify its performance as it relates to such law, regulation, or determination. CO-OP Financial Services shall cooperate in good faith to continue its relationships with Card Issuers, ATM Owners, and POS merchant Processors by making those modifications as may be required to comply with such law, regulation, or determination. REVISED 09/13 Page 39

41 SECTION 6 SETTLEMENT PROCESS DUTIES & RESPONSIBILITIES Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

42 Section 6 SETTLEMENT PROCESS DUTIES & RESPONSIBILITIES SETTLEMENT PROCESS DUTIES & RESPONSIBILITIES 6.1 SETTLEMENT A. Member Institutions shall establish and maintain a settlement account in accordance with a settlement agreement with a settlement institution acceptable to CO-OP Network, as a condition of receiving any electronic services provided by CO-OP Financial Services. Member Institutions are responsible for settlement payment regardless of the aforesaid arrangement, and shall remain primarily responsible and liable for performing the settlement obligations required under the Agreement with CO-OP Financial Services. Member Institutions shall authorize the settlement institution to make debits or credits to the Member Institution s account based on the net amount reported on the daily summary of settlement reports provided by CO-OP Network and other charges of which the settlement institution is notified by CO-OP Financial Services. The net amount reported on the daily summary may, at CO-OP Financial Services option, be an estimate based upon the same day of the week that was reported on the daily summary of settlement reports for the most recent available period. B. CO-OP Financial Services shall deliver net settlement to settlement institution for each Settlement day which may contain an estimated net amount as provided in Section 6.1.A above. If, for any reason, CO-OP Financial Services is unable to generate a net settlement position on any Settlement Day, CO-OP Financial Services will process a provisional settlement entry on that Settlement Day which will be based upon the net settlement that was processed on the same day that was reported on the daily summary of settlement reports for the most recent available period. Once CO-OP Financial Services is able to generate an actual settlement for that day, CO-OP Financial Services will reverse the provisional settlement entry and process actual settlement entry for such day. If CO-OP Financial Services, for any reason whatsoever, does not deliver an actual or provisional net settlement to the settlement institution to allow for the settlement in same day funds for the activity through the Switch, the settlement institution will be instructed by CO-OP Financial Services to credit the Member Institution s account with interest for each calendar day that settlement is outstanding. Interest shall be based on Federal funds effective Rate Plus 1% on such Settlement Day. The term "Settlement Day" as used herein shall mean a Business Day ending at the applicable cut-off time specified by CO-OP Financial Services, which is not a Federal Reserve holiday. Electronic activity performed on days other than Business Days (weekends and holidays) will be settled on the first Business Day following that activity. C. At each month end, all transaction fees, switch fees, processing fees and other maintenance charges, which may, at CO-OP Financial Services option be estimated amounts as provided in Section 6.1.A above, shall be reported by CO-OP Financial Services to the settlement institution for debit or credit to Member Institution s account. End of month reports will be available within six (6) Credit Union Business Days of the last day of the month. D. The Member Institution shall maintain immediately available funds in the settlement institution to meet settlement requirements. Failure to make settlement on the required settlement day shall result in the suspension or termination of services, however, suspension or termination of services shall not relieve the Member Institution from the payment of charges, fees, costs and payments provided under the Agreement and these ORRs. REVISED 09/13 Page 41

43 Section 6 SETTLEMENT PROCESS DUTIES & RESPONSIBILITIES CO-OP Financial Services shall have the right to suspend services to a Member Institution without settlement services until one (1) Business Day following the date on which the settlement institution agrees to resume the performance of settlement services for the Member Institution, and CO-OP Financial Services is given written notice of that fact. The suspension or termination of services provided by CO-OP Financial Services for the failure of the Member Institution to comply with this Section 6.1.D shall not be a cause for termination of the Agreement by the Member Institution. E. If the Member Institution disputes the amount of its credit or debit positions set forth in any of the settlement reports, it must adhere to the error resolution procedures of the appropriate network. In any event, and regardless of the existence of any disputed amount, the Member Institution shall make the timely transfer of funds (even disputed amounts) pursuant to the settlement process in accordance with the amounts shown on the net settlement reports. If the Member Institution s settlement account is credited in an improper amount for whatever reason and without regard to fault, the Member Institution shall, upon discovery, or upon being notified, whichever event first occurs, transfer or cause to be transferred immediately to the account designated by CO-OP Financial Services the amount improperly credited, together with interest on such amount at a rate equal to the applicable Federal funds effective Rate Plus 1% from the date the Member Institution received the improper credit to and including the date of transfer. If the Member Institution settlement account is debited in an improper amount for whatever reason and without regard to fault, CO-OP Financial Services shall, upon discovery or upon being notified, whichever event first occurs, transfer immediately to the Member Institution the amount improperly debited, together with interest on such amount at a rate equal to the applicable Federal funds effective Rate Plus 1% from the date the Member Institution was improperly debited to and including the date of transfer. F. The provision for crediting and debiting of interest to the Member Institution under the above Section 6.1.E for delayed settlement or erroneous or improper settlement shall not be effective until CO-OP Financial Services has given at least fifteen (15) calendar days prior written notice to the Member Institution. G. The Member Institution shall be responsible for auditing, balancing and verifying the correctness of all transaction data contained in the daily settlement reports and reconciling any out-of-balance condition, and notifying CO-OP Financial Services of all errors in the foregoing within twenty-four (24) hours (exclusive of weekends and Member Institution holidays) after receipt of the applicable settlement reports. The Member Institution shall pay costs and fees associated with reconcilement if the notice of errors is not received by CO-OP Financial Services within the said twenty-four (24) hours. REVISED 09/13 Page 42

44 Section 6 SETTLEMENT PROCESS DUTIES & RESPONSIBILITIES 6.2 SECURITY PROVISION A. Each Card Issuer in CO-OP Network grants a security interest in its settlement account in favor of all entities acting as Servicing Agents processing deposits for Card Issuer Institutions. This security interest shall secure performance of Card Issuer's obligation to re-credit an ATM Owner for the amount of any properly processed exception deposits or returned or dishonored deposits and Card Issuer's obligation to pay fees and service charges. B. If a Card Issuer ceases to carry on its business, makes an assignment for the benefit of its creditors, or if a receiver or similar officer is appointed, or if procedures under any bankruptcy or insolvency law are commenced against a Card Issuer, in that event, CO-OP Financial Services is hereby authorized to exercise the rights of all entities acting as Servicing Agents against the security interest and is hereby authorized to direct the holders of the Card Issuer's settlement account to pay the amounts due to all ATM Owners whom the Card Issuer owes credits. C. All ATM Owners afforded the status of secured parties shall be deemed to have equal rank and priority as to the collateral irrespective of the date of execution of the CO-OP Financial Services Agreement or instrument creating such security interest, and all such ATM Owners/Servicing Agents shall share pro rata according to the amount of their claims in the distribution of collateral under this provision. REVISED 09/13 Page 43

45 SECTION 7 FEES AND CHARGES Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

46 Section 7 FEES AND CHARGES FEES AND CHARGES 7.1 FEES AND CHARGES A. Processing and Network Access participants shall pay CO-OP Financial Services the fees and charges set forth in Invoice Policy and Fee Schedule in Section 8 for services and products provided as well as all fees and charges designed as pass-through or owing to a third party. Additional services and products offered by CO-OP Financial Services and utilized by the Card Issuer or ATM Owner will be upon the terms, conditions, and prices set forth in Section 8. Prices for the services and products, which are not included in Section 8 shall be governed by terms, conditions, and prices established by CO-OP Financial Services and provided to Processing and Network Access participants from time to time. CO-OP Financial Services may increase prices from time to time upon ninety (90) calendar days prior written notice. (No advance notice is required for increases in interchange as well as pass through fees generated by External Networks and other providers). CO-OP Financial Services reserves the right to recover, at a later time, amounts either not billed or not properly billed including, without limitation, pass-through fees (as designated in Section 8 or elsewhere in the ORRs or Agreement with CO-OP Financial Services). B. There shall be added to all fees and charges for the services and products provided, amounts equal to any applicable taxes levied or based on the services or products furnished, exclusive of taxes based on CO-OP Financial Services net income. Property taxes levied on leased equipment shall be paid by the party for whose benefit such equipment shall have been leased unless Member Institution provides appropriate documentation that exempts Member Institution from such taxes levied. C. Fees and charges which are not paid through direct settlement under the settlement agreement with the settlement institution are due upon receipt of a statement from CO-OP Financial Services for the services and products covered thereby and shall be paid within thirty (30) days thereafter. D. If a party fails to pay any amounts when due, it shall, upon demand, pay as a result of such delinquency, a late payment penalty of 5% of the amount due plus interest at the rate of 2% per month beginning thirty (30) days after the due date and continuing until paid in full (but in no event shall said interest rate be more than the highest rate of interest allowed by law). In addition, at CO-OP Financial Services sole discretion may require Member Institution to provide a debit authorization form to CO-OP Financial Services to authorize CO-OP Financial Services to direct settle for fees and charges due. The debit authorization form shall be submitted within ten (10) Credit Union Business Days from the date CO-OP Financial Services made such request. E. A party s internal auditors, or its independent public accountants, have the right, during normal business hours and upon reasonable advance notice to CO-OP Financial Services, to review, at the party s own expense, CO-OP Financial Services books and records relating to CO-OP Financial Services charges to the party for services and products purchased by it hereunder. CO-OP Financial Services reasonable costs for its time and expenses accommodating a party s internal auditors or its independent auditors shall be paid by that party to CO-OP Financial Services within ten (10) Business Days of receipt of the invoice for the same. REVISED 09/13 Page 45

47 Section 7 FEES AND CHARGES F. Any claim for billing discrepancies or money owing to a party as the result of a billing discrepancy by CO-OP Financial Services may not be raised after six (6) months from the date the charge was invoiced and the party waives any claim for money owing to the other party if such claim is not made within six (6) months of the date the charge was invoiced. REVISED 09/13 Page 46

48 SECTION 8 INVOICE POLICY AND FEE SCHEDULES Operating Rules and Regulations Copyright 2016 CO-OP Financial Services without the prior written permission of CO-OP Financial Services. All Rights Reserved

49 Section 8 INVOICE POLICY & FEE SCHEDULES INVOICE POLICY & FEE SCHEDULES Network transaction fees that are included in the institution fee settlement report associated with a Member Institution s EFT program will be debited/credited to the Member Institution s appropriate account within the first six (6) Business Days following month-end. All processing fees, charges, and other items associated with a Member Institution s EFT program that are invoiced will be debited/credited to the Member Institution s appropriate settlement account on the last Business Day of the month invoice is delivered on the Extranet. Any services not enumerated, which are provided by CO-OP Financial Services to the Member Institution will be invoiced on a periodic basis at agreed upon prices. Fees do not include charges to the Member Institution by its data Processor. Payment schedule and the frequency of payment may be changed upon thirty (30) calendar days prior written notice to the Member Institution. The fees and charges in this section may be changed in accordance with the terms of the Agreement with CO-OP Financial Services. Payments of invoices will be the net of the invoice less any issued credit memos. 8.1 Telecommunications, Processing and Operational Charges A. Annual and One-Time Fees B. Monthly Fees C. Other Fees D. Telecommunications/Equipment Charges E. Testing and Certification F. Database Maintenance/Changes Policies and Procedures 8.2 Optional Network Fees and Charges A. Accel/Exchange B. AFFN C. American Express D. Cirrus/MasterCard E. Discover F. EBT G. Interlink H. Maestro I. MoneyPass Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 48

50 Section 8 INVOICE POLICY & FEE SCHEDULES J. NYCE K. PLUS/Visa L. Pulse M. STAR System N. Other Networks 8.3 Network Transaction Fees for Principal Members 8.4 Network Transaction Fees for Network Access Members 8.5 Signature Debit/Credit Card Processing Card Issuer Only 8.6 Products and Services Not Listed Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 49

51 Section 8 INVOICE POLICY & FEE SCHEDULES 8.1 TELECOMMUNICATIONS, PROCESSING AND OPERATIONAL CHARGES A. Annual and One Time Fees 1. One Time - ATM Processing $500 per credit union 2. One Time - Cooperative Authorization Processing $1, One Time - Complete Authorization Processing $1, Annual - CO-OP Financial Services Non-Shareholder $3, ATM Add - Initialization a. Non-Surcharging $500 per ATM b. Surcharging $600 per ATM c. Comvelopes $2 per comvelope 6. One Time - Institution Surcharge (Per credit union electing to surcharge in accordance with CO-OP Network rules as stipulated in Section 2 of the ORRs). B. Monthly Fees $1, Institution $100 per month 2. Processor Support $150 per month 3. Processor Support - Intercept $350 per month 4. Card Account File (CAF) Record Storage $.02 per record 5. Card Account File (CAF) Batch Update (Applied upon receipt except for the 2:00 p.m. 3:00 p.m. PT window). $50 per month 6. Stand-In - Transaction Authorized by Switch $.03 per transaction 7. Complete and Cooperative Transaction a. Pre-Authorization $.02 per transaction b. Settlement $.02 per transaction 8. Auto Reconciliation of Non CO-OP Network Transactions $.0055 per transaction 9. Disaster Recovery Support $75 per additional connection (TSAP) per month 10. ATM Support (excludes NextGen, which is quoted separately) Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 50

52 Section 8 INVOICE POLICY & FEE SCHEDULES The CO-OP Network ATM Support fee calculation is based on a step through process, in which a Member Institution pays the appropriate fee for transactions in each tier up through the total number of transactions. a. First 10 ATMs $60 per ATM b ATMs $50 per ATM c ATMs $40 per ATM (Monthly support fee begins when ATMs added to database and continues until deleted. Failure to bring ATM live will result in fee assessment.) 11. ATM - Dial-Up a. Modem Purchase quoted b. Telecommunications Base $27 per terminal, per month c. Dial-up Transaction - DANO Devices connecting to FIS $.05 per transaction d. Dial-up Transaction - Internal Modem connecting to TNS $.0375 per transaction e. Relocation $200 per ATM f. Monitoring (Refer to Section 8.1.B.10. ATM Support) (Credit union is responsible for ordering and maintaining phone line, provided by local phone company). 12. Basic Fraud Package $65 per month a. Address Verification (requires Card Account File Record Storage and Cooperative or Complete Authorization) b. Authorization Block c. Card Alert Services d. CO-OP Concierge i. VIP Authorization Block Bypass ii. Falcon Travel Notification (requires Card Account File Record Storage and prerequisite Falcon Fraud Manager) e. CVV/CVC/CVI Authentication f. CVV2/CVC2 Authentication g. Daily Limits (requires Card Account File Record Storage) h. Exact Expiration Date Match (requires Card Account File Record Storage and Cooperative or Complete Authorization) i. Name Match (requires Card Account File Record Storage) Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 51

53 Section 8 INVOICE POLICY & FEE SCHEDULES 13. Web Desktop Director C. Other Fees a. Set-Up $35 per user b. User ID $40 each per month 1. DataNavigator/EMS (Pin Based Adjustments) a. Adjustment $4 (to Acquirer) b. Late Adjustment $10 (to Acquirer) c. Deposit Correction Adjustment $4 (to Issuer) d. Chargeback $14 (to Acquirer) e. Representment $10 credit (to Acquirer) f. Photo request $4 (to Issuer) g. Entered by CO-OP Financial Services $5 per item 2. Cardholder Maintenance a. Entered by CO-OP Financial Services $7.50 per item 3. Cardholder Lost/Stolen Call a. Call with no action $7.50 per call b. Call with card block $7.50 per block 4. Research (After two months) $5 per item 5. Non Credit Union Owned Third Party ATM Image Request $15 per item 6. Management Reports (Excludes Revelation Generated reports, which are quoted separately) Set-up fee quoted $100 per report distribution 7. PAN Listing Report (AP Print) $75 per report 8. PAN Generation Listing $100 per BIN 9. Postage pass through/quoted 10. User Manuals a. Electronic Material $0 b. Manuals - Printed and Bound $55 + shipping and handling 11. Risk Finder a. BIN Set-Up $500 per BIN b. Support $150 per month c. Report Redistribution $50 per report Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 52

54 Section 8 INVOICE POLICY & FEE SCHEDULES 12. Training a. At credit union location i. Individual training after implementation (May be shared by three credit unions sending personnel to one credit union location) $85 per hour, per trainer (four hour minimum) ii. Expenses pass through (e.g., travel, hotel and meals, in accordance with CO-OP Financial Services Travel policies/guidelines) b. At CO-OP Financial Services office $50 per hour, per trainer (one hour minimum) c. Training Workshop/Event $149 per person d. CO-OP Financial Services Onsite DND Suite/Lab $49 per person e. Webinar Classes $0 13. Report Facility a. FTP (File Transfer Protocol) Web i. Set-Up $250 ii. Per megabyte transferred b. FTP (File Transfer Protocol) Dedicated Circuit $10 per megabyte i. Set-Up $500 ii ,000 transactions iii. 250, ,000 transactions iv. 500,001+ $450 per month $550 per month $650 per month v. Circuit costs (if applicable) quoted 14. SMART Reports a. Online Processor $35 per month b. Offline Processor $25 per month 15. User Settlement File a. Set-Up $500 per end point b. Monthly Support $300 per month c. Subsequent File Changes per Endpoint $100 per request d. Redistribution $150 per day 16. Professional Services $150 per hour (one hour minimum) 17. Rates for Materials and Travel (Includes, but not limited to: cables, computer resources, shipping, transportation costs, lodging and meals). pass through/quoted Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 53

55 Section 8 INVOICE POLICY & FEE SCHEDULES D. Telecommunications/Equipment Charges quoted All telecommunication equipment (lines and modems) will be ordered through CO-OP Financial Services. CO-OP Financial Services will bill these items to the appropriate Member Institution. Amounts may be subject to state and local taxes. Telecommunication costs are subject to change due to tariff adjustments and CO-OP Network telecommunications network changes. E. Testing and Certification Changes to the database may require testing and certification prior to implementation. These can include: authorization method changes, PIN Validation for new cardbases, TCP/IP protocol and report retrieval. 1. Online Certification Business day 05:00 to 17:00 Pacific Time (PT) (Billed in 3 hour increments see below) 2. File or Report Transmission Business day 05:00 to 17:00 Pacific Time (PT) (Billed in ½ hour increments, with a minimum 1 hour for first day initial set-up) $125 per hour $125 per hour Rates include all computer hardware and software required to prepare for the test, perform the test, dismantle the test and perform normal test results analyses. Test segments are scheduled in two and ½ hour increments. In addition, a charge equal to one half hour of the rate for use of the test switch will be assessed daily. If testing has to be cancelled, notification must be given no later than 10:00 a.m. Pacific Time, on the last business day before testing is scheduled or the full fee will be assessed. All testing charges, including vendor testing on behalf of the Member Institution, will be billed to the Member Institution by CO-OP Financial Services. Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 54

56 Section 8 INVOICE POLICY & FEE SCHEDULES F. Database Maintenance/Change Policies and Procedures 1. Scheduling Normal CO-OP Network maintenance will occur at 1:00 a.m. PT on Mondays. Changes will not be scheduled for Friday, Saturday or Sunday. Member Institutions shall notify CO-OP Financial Services in advance of any database changes. All database maintenance charges will be billed directly to the Member Institution by CO-OP Financial Services. (Lease line ATM installations require a minimum 8 week lead time to ensure compliance with nationwide telecommunications carriers.) 2. Lead Time and Fee Schedule Database Maintenance Fees Invoiced as: Database Change Single Element Changes Changes that result in modification of a single database element or field per database record. Standard Class A minimum of 15 Business Days advance notice Emergency Class Changes requested with less than 15 Business Days advance notice Change fees apply per item or database record (ATM, Card Base, etc.) unless bundled within a single request. ATMS ATM Single Element Change ATM Time Zone Offsets ATM Bill Denominations ATM Surcharge Amounts ATM Name/Address changes ATM Screen/Receipt changes (Spanish, Welcome, Wait) ATM Card Reader types ATM Change to rear settlement ATM Dispense Algorithm Existing Fast Cash changes Reverse at Time-Out Field BUNDLED CHANGES Identical single element changes to multiple ATMs can be bundled into one Database Maintenance change fee up to a maximum of 10 ATMs when submitted collectively for one install date within standard lead times. *Expedite Fee Applies $250 $450 $250 N/A Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 55

57 Section 8 INVOICE POLICY & FEE SCHEDULES Database Maintenance Fees Invoiced as: Database Change Single Element Changes Changes that result in modification of a single database element or field per database record. Change fees apply per item or database record (ATM, Card Base, etc.) unless bundled within a single request. INSTITUTION Name Change, Funds Movement Changes, and Reporting Changes (combined or individual) FALCON RULES Standard Class A minimum of 15 Business Days advance notice Emergency Class Changes requested with less than 15 Business Days advance notice *Expedite Fee Applies $250 $450 Rule addition or changes in Falcon $250 N/A *15 day advance notice does not apply OFF-CYCLE CHANGES $100 $100 Other: Tuesday, Wednesday or Thursday changes require approval by CO-OP Financial Services management and are in addition to all other applicable fees. *EXPEDITE FEE Fee imposed, in addition to any Priority or Emergency Change Fees, to cover reprioritization workloads, overtime, etc. N/A $750 Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 56

58 Section 8 INVOICE POLICY & FEE SCHEDULES Database Maintenance Fees Invoiced as: Database Change Complex PROCESSOR Standard Class A minimum of 21 Business Days advance notice Priority Class Changes requested with less than 10 and more than 5 Business Days advance notice *Expedite Fee Applies Emergency Class Changes requested with 5 or less Business Days advance notice *Expedite Fee Applies Add Processor/Intercept Processor $250 $1,000 $2,200 Change/Delete Processor $250 $600 $1,200 INSTITUTIONS Add/Change/Delete credit union behind Existing Processor ATMS Intercept terminals - Add/Change/Delete (pseudo terminal ID) $250 $600 $1,200 $250 $750 $1,000 ATM Change/Delete $250 $350 $450 CARD BASES Principal: Add/Change/Delete - per BIN $250 $750 $1,500 NAO: Add/Change/Delete - all BINs $250 $750 $1,500 TELECOM Telecom/PROC Change/Delete $250 $750 $1,500 Telecom Add quoted quoted quoted OFF-CYCLE CHANGES Other: Tuesday, Wednesday or Thursday changes require approval by CO-OP Financial Services management and are in addition to all other applicable fees. *EXPEDITE FEE Fee imposed, in addition to any Priority or Emergency Change Fees, to cover reprioritization workloads, overtime, etc. $500 $500 $500 N/A $750 $750 Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 57

59 Section 8 INVOICE POLICY & FEE SCHEDULES Other Implementation Fees ATMS Standard Class A minimum of 21 Business Days advance notice Priority Class Changes requested with less than 10 and more than 5 Business Days advance notice *Expedite Fee Applies Emergency Class Changes requested with 5 or less Business Days advance notice *Expedite Fee Applies Adding ATM without surcharging $500 $750 $1,000 Adding ATM with surcharging $600 $750 $1,000 FILES User Settlement File Add $500 $750 $1,500 CAF Batch Maintenance Add $250 $750 $1,500 CAF Batch Maintenance Update $300 $750 $1,500 Posting File Add $250 $750 $1,500 AP (positive file, positive file balances) Add OFF-CYCLE CHANGES with Other: Tuesday, Wednesday or Thursday changes require approval by CO-OP Financial Services management and are in addition to all other applicable fees. *EXPEDITE FEE Fee imposed, in addition to any Priority or Emergency Change Fees, to cover reprioritization workloads, overtime, etc. $250 $750 $1,500 $500 $500 $500 N/A $750 $750 Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 58

60 Section 8 INVOICE POLICY & FEE SCHEDULES 8.2 OPTIONAL NETWORK FEES AND CHARGES Additional network fees may also be passed through to CO-OP Financial Services to be passed on to Member Institution, or such network fees may be billed directly from the networks to the Member Institution. Please refer to each network s operating rules and fee schedules for complete and up to date fee information. A. Accel/Exchange CO-OP Network Support Fee $0 Adjustments entered through DataNavigator/EMS Refer to Appendix A B. AFFN CO-OP Network Support Fee $0 Adjustments entered through DataNavigator/EMS Refer to Appendix A C. American Express CO-OP Network Support Fee $0 Adjustments entered through DataNavigator/EMS Refer to Appendix A D. Cirrus/MasterCard CO-OP Network Support Fee Adjustments entered through DataNavigator/EMS $75 per month Refer to Appendix A E. Discover CO-OP Network Support Fee $0 Adjustments entered through DataNavigator/EMS Refer to Appendix A F. EBT CO-OP Network Support Fee Adjustments entered through DataNavigator/EMS $50 per month Refer to Appendix A G. Interlink CO-OP Network Connect Fee Support Fee Adjustments entered through DataNavigator/EMS $750 one time $75 per month Refer to Appendix A Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 59

61 Section 8 INVOICE POLICY & FEE SCHEDULES H. Maestro CO-OP Network Support Fee Adjustments entered through DataNavigator/EMS $75 per month Refer to Appendix A I. MoneyPass CO-OP Network Support Fee Adjustments entered through DataNavigator/EMS $75 per month Refer to Appendix A J. NYCE CO-OP Network Support Fee Adjustments entered through DataNavigator/EMS $75 per month Refer to Appendix A K. PLUS/VISA CO-OP Network Support Fee Adjustments entered through DataNavigator/EMS $75 per month Refer to Appendix A L. PULSE CO-OP Network Support Fee Adjustments entered through DataNavigator/EMS $75 per month Refer to Appendix A M. STAR System CO-OP Network Support Fee Adjustments entered through DataNavigator/EMS $65 per month Refer to Appendix A N. Other Networks CO-OP Network Support Fee Adjustments entered through DataNavigator/EMS $75 per month Refer to Appendix A Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 60

62 Section 8 INVOICE POLICY & FEE SCHEDULES 8.3 NETWORK TRANSACTION FEES FOR PRINCIPAL MEMBERS CO-OP Network On-Premise CO-OP Network Off-Premise Non credit union owned Third Party ATM CO-OP Network Switch Fee On-Us (Direct Connect ATM) CO-OP Network Interchange and Switch Fees Card Issuer Interchange Transaction Fees - Principal Member Deposit Withdrawal Transfer Balance Inquiry Denial $1.50 $0.50 $0.10 $0.10 $0.30 $2.00 $0.60 $0.11 $0.11 $0.30 $2.00 $0.89 $0.30 $0.30 $0.30 Card Issuer Switch Fees - Principal Member Deposit Withdrawal Transfer Balance Inquiry Denial $0.05 $0.05 $0.05 $0.05 $0.05 Tiered 1 Tiered 1 Tiered 1 Tiered 1 Tiered 1 1 credit union On-Us transactions less than 100,001 per month credit union On-Us transactions equal 100,001 to 200,000 per month credit union On-Us transactions greater than 200,000 per month $0.04 per transaction $0.035 per transaction $0.03 per transaction CO-OP Network On-Premise CO-OP Network Off-Premise ATM Owner Interchange Income - Principal Member Deposit Withdrawal Transfer Balance Inquiry Denial $1.50 $0.50 $0.10 $0.10 $0.30 $2.00 $0.60 $0.11 $0.11 $0.30 Fee Schedule Gateway Switch Fees 1 CO-OP Network Gateway Interchange & Switch Fees Switch fees range from $0.02 to $0.11 depending on External Network and transaction type. 1 Interchange fees are set by the individual External Network and are available through applicable External Network. Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 61

63 Section 8 INVOICE POLICY & FEE SCHEDULES CO-OP Network PIN POS 1 CO-OP Network (Stamps) Point of Sale Transaction Fees - Principal Member (Issuer Only) Pre- Authorization Direct Debit Return/ Charge Back Balance Inquiry Denial Merchant Fee Paid to Issuer $.05 2 $.05 2 $.05 2 $.05 2 $.05 2 See note 3 N/A $.09 N/A N/A $.07 N/A Publix $.05 $.05 $.05 $.05 $.05 $.12 STAR $.12 $.06 $.06 $.06 $.06 See note 3 Maestro $.10 $.10 $.10 $.10 $.10 $.95 AFFN $.115 $.065 $.09 $.09 $.09 $1.05 Interlink $.10 $.10 $.10 $.10 $.10 See note 3 NYCE $.06 $.06 $.06 $.06 $.06 $.06 Pulse $.05 $.05 $.05 $.05 $.05 N/A MasterCard $.05 $.05 $.05 $.05 $.05 See note 3 Visa $.05 $.05 $.05 $.05 $.05 See note 3 1 Other Star Network fees may apply. 2 PIN POS Service Fee of $.0325 per transactions will be assessed in addition to the standard CO-OP Network PIN POS switch fee. 3 Pass through from network. (Interchange fee schedule available through applicable network). All tiered rates contained in this table are calculated using a step through process, in which a Member Institution pays the appropriate fee for transactions in each tier up through the total number of transactions. Point of Sale Transaction Fees - Acquirer Only APPROVED DENIED CO-OP Network N/A 1 N/A 1 Other Networks $0.19 $ Paid by Issuer Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 62

64 Section 8 INVOICE POLICY & FEE SCHEDULES 8.4 NETWORK TRANSACTION FEES FOR NETWORK ACCESS MEMBERS Any participating Third Party Processor or a direct connect Network Access Member Institution, must link directly with CO-OP Network switch and route all CO-OP Network transactions to the CO-OP Network switch. A CO-OP Network transaction is defined as any transaction at an ATM owned by CO-OP Network or a Principal or Network Access participant, with the exception of On-Us transactions (credit union member at that credit union s ATM) or foreign acquirer transactions (a bank cardholder at a CO-OP Network ATM). a. One-Time Network Access Participant Fee $2500 b. Network Access Participant Fee $150 per month i. Includes 1 Web Desktop Director User ID ii. Web Desktop Director User ID 2 + (see section 8.1.b.13) c. Premium switch fee $0.20 per transaction The switch fee is calculated and assessed in addition to the regular transaction fees as outlined in this section. The switch fee applies to both Issuer and Acquirer transactions. A premium switch fee will not be assessed for CO-OP Network specific POS transactions. Star Network fees may apply. Please refer to the POS transaction table below for CO-OP Network specific fees. CO-OP Network On-Premise CO-OP Network Off-Premise Non credit union owned Third Party ATM Card Issuer Interchange Transaction Fees - Network Access Members Deposit Withdrawal Transfer Balance Inquiry Denial $1.50 $0.50 $0.10 $0.10 $0.30 $2.00 $0.60 $0.11 $0.11 $0.30 $2.50 $1.07 $0.30 $0.30 $0.30 Card Issuer Switch Fees - Network Access Members CO-OP Network $0.09 $0.09 $0.09 $0.09 $0.09 Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 63

65 Section 8 INVOICE POLICY & FEE SCHEDULES CO-OP Network On-Premise CO-OP Network Off-Premise CO-OP Network PIN POS Service 1 CO-OP Network (Stamps) ATM Owner Interchange Income - Network Access Members Deposit Withdrawal Transfer Balance Inquiry Denial $1.50 $0.50 $0.10 $0.10 $0.30 $2.00 $0.60 $0.11 $0.11 $0.30 Point of Sale Transaction Fees - Network Access Members Pre- Authorization Direct Debit Return/ Charge Back Balance Inquiry Denial Merchant Fee Paid to Issuer Tiered 2 Tiered 2 Tiered 2 Tiered 2 Tiered 2 See Note 3 N/A $.09 N/A N/A $.07 N/A Publix $.05 $.05 $.05 $.05 $.05 $.12 1 Other Star Network fees may apply. 2 The CO-OP Network PIN POS switch fee calculation is based on a step through process, in which a Member Institution pays the appropriate fee for transactions in each tier up through the total number of transactions. credit union PIN POS Service transactions less than or equal to 100,000 credit union PIN POS Service transactions equal 100,001 to 500,000 credit union PIN POS Service transactions greater than 500,000 3 Pass through from network. (Interchange fee schedule available) $.06 per transaction $.05 per transaction $.04 per transaction Point of Sale Transaction Fees - Acquirer Only APPROVED DENIED CO-OP Network N/A 1 N/A 1 Other Networks $0.19 $ Paid by Issuer Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 64

66 Section 8 INVOICE POLICY & FEE SCHEDULES 8.5 SIGNATURE DEBIT/CREDIT CARD PROCESSING - CARD ISSUER ONLY Additional network fees may also be passed through to CO-OP Financial Services to be passed on to Member Institution, or such network fees may be billed directly from the networks to the Member Institution. Please refer to each network s operating rules and fee schedules for complete and up to date fee information. SIGNATURE DEBIT/CREDIT CARD PROCESSING - CARD ISSUER ONLY Debit Support Fee Credit Support Fee Electronic fraud reporting for MC via DataNavigator Electronic fraud reporting for VISA via DataNavigator Chargeback Processing Entered By CO-OP Financial Services DN/EMS Signature Based Adjustment Draft Request Dispute Analysis and Processing Chargebacks Compliance & Arbitration Filings VISA Check/Debit MasterCard Fees quoted separately by VISA/MasterCard $250 per month $250 per month $5.00 per transaction $5.00 per transaction $2.50 per adjustment $10 per item $10 per item $20 per item $20 per item 8.6 PRODUCT AND SERVICES NOT LISTED Products and services not listed will be quoted. Copyright 2016 CO-OP Financial Services REVISED 04/17 Page 65

67 SECTION 9 GRIEVANCE PROCEDURES Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

68 Section 9 GRIEVANCE PROCEDURES GRIEVANCE PROCEDURES 9.1 RESOLUTION OF DISPUTES In the event of a dispute regarding liability for loss on a transaction, such dispute shall be settled as provided in these ORRs. A. Claim Submission An aggrieved party "Claimant" shall submit a claim regarding the dispute in written form, along with all documents deemed relevant thereto, to CO-OP Financial Services for determination by the management of CO-OP Financial Services (hereinafter referred to as "Management") regarding liability. This claim must be submitted within forty (40) Business Days of the date of the final exception action. Upon receipt of the claim, CO-OP Financial Services shall furnish a copy of the claim with documentation to the party against whom the claim is asserted ("Respondent") within ten (10) Business Days. Respondent shall submit a written response, along with documentation deemed relevant, to CO-OP Financial Services within ten (10) Business Days following receipt of the claim, and a copy of such written response shall be furnished to Claimant by CO-OP Financial Services within ten (10) Business Days A written reply by Claimant and a written rebuttal to the reply by the Respondent shall be permitted only upon the request of Management and, if so requested, such writings shall be furnished within ten (10) Business Days of the request. Thereafter, and within twenty (20) Business Days after receipt of all writings, Management shall make a determination of liability among the parties to the dispute and shall notify all parties in writing of its decision. If a period longer than twenty (20) Business Days is required, both parties will be notified by CO-OP Financial Services. B. Appeal The decision of Management rendered pursuant to Paragraph A may be appealed by either party to the Claims Review Committee (described in Section 16) within ten (10) Business Days after the date on which the party received notice of the decision. To initiate an appeal, either party may notify CO-OP Financial Services in writing of its request for a review by the Claims Review Committee, along with an arbitration filing fee of $100, and Management shall promptly submit all written materials concerning the claim to the Committee. Management shall also notify both parties, in writing, of the request for appeal. The Claims Review Committee s final decision will be communicated to both parties, in writing, within forty (40) Business Days. In the event the Claims Review Committee rules in favor of the requesting party, the arbitration fee shall be refunded. C. Interest Recovery The prevailing party shall be entitled to recover interest on the claim based on the Federal funds effective rate, plus 1%, specified on the date the decision is final under the foregoing procedures from the time of written demand by Claimant against Respondent for payment of the claim, or if no such demand is made, from the time the claim is submitted to CO-OP Financial Services until the claim is paid. D. Extensions The time periods prescribed may be extended by Management when the dispute is pending before it, or by the Committee when the dispute is pending before it, for a period not to exceed REVISED 09/13 Page 67

69 SECTION 10 GRAPHICS STANDARDS Operating Rules and Regulations related information may be reproduced or transmitted in any form, by any means (electronic, photocopying, recording, or otherwise)

70 Section 10 GRAPHIC STANDARDS GRAPHIC STANDARDS Please refer to the CO-OP Network Graphic Standards Manual. related information may be reproduced or transmitted in any form, by any means (electronic, photocopying, recording, or otherwise) REVISED 09/13 Page 69

71 SECTION 11 DEPOSIT PROCESSING PROCEDURES Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

72 Section 11 DEPOSIT PROCESSING PROCEDURES DEPOSIT PROCESSING PROCEDURES NOTE: NextGen Shared Branching transactions must adhere to the CO-OP Shared Branching ORRs APPOINTMENT OF ATM OWNER AS SERVICING AGENT The ATM Owner accepts the responsibility of a Servicing Agent for processing deposits at ATMs designated by CO-OP Network. The ATMs for which the ATM Owner has deposit service responsibilities are all the shared network ATMs owned/operated or controlled by the ATM Owner REMOVAL OF DEPOSITS The ATM Owner shall: A. Removal of the deposits must be accomplished every credit union Business Day. Deposits must be removed under Dual Control. Envelope free deposits must be processed no later than end of Credit Union Business Day following the Credit Union s Business Day that the deposit was made. B. Refrain from handling Foreign Deposits that did not go into the ATM (i.e., deposits from night depository, slipped under the door or through door slots, etc.) as ATM deposits and refrain from processing them according to these procedures. They should be promptly returned to the Card Issuer duly accompanied with a transmittal letter PROCESSING DEPOSITS ATM Owners shall process a deposit no later than end of Credit Union Business Day following the Credit Union Business Day the item was removed from the ATM in accordance with the following procedures: For Envelope Deposits A. ATM Owners are required to demonstrate that Dual Control was in effect when processing deposits. (Video surveillance cameras satisfy the Dual Control requirement if the camera is dedicated specifically to the process of opening and processing deposits). B. Compare and reconcile contents of all deposit envelopes with the audit tape or other documents which support the ATM transactions, unless the ATM Owner uses an automated deposit reconcilement system. C. Record on the audit tape, envelope, deposit slip or cash ticket, all cash contained in an envelope and process cash according to the credit union's internal procedures. For identification purposes, record the Cardholder s number on the supporting document. D. Log discrepancies on the ATM balancing sheet, audit tape or other journal for such purpose as may be prescribed by the credit union. 1. Determine whether the discrepancy is for a Foreign or On-Us Deposit transaction by matching the first six (6) digits of the Cardholder number with the BIN within the contacts of the Extranet. REVISED 06/14 Page 71

73 Section 11 DEPOSIT PROCESSING PROCEDURES 2. (Process all Foreign Deposit transaction discrepancies as an Adjustment according to 11.4 in this section. Process all On-Us Deposit transaction discrepancies according to the ATM Owner's internal procedure. For Envelope Free Deposits A. ATM Owners are required to proof and balance all deposits with a deposit validation system. B. Compare and reconcile any discrepancies that are presented in the deposit validation system. C. Record all cash deposited in the ATM and process cash according to the credit union s internal procedures. D. Log discrepancies on the ATM balancing sheet, audit tape or other journal for such purpose as may be prescribed by the credit union. 1. Determine whether the discrepancy is for a Foreign or On-Us Deposit transaction by matching the first six (6) digits of the Cardholder number with the BIN number within the Contacts of the Extranet. 2. Process all Foreign Deposit transaction discrepancies as an Adjustment according to 11.4 in this section. Process all On-Us Deposit transaction discrepancies according to the ATM Owner's internal procedure. Sections E and F below contain the requirements for verifying Foreign Deposits E. With respect to any deposit, item(s) of which total $2,500 or less, verify the contents to determine whether any of the following irregularities exist: The deposit envelope is empty (not applicable for envelope free deposits); Deposited currency appears to be counterfeit; Deposited currency is foreign (Non-U.S.); Any part of the deposit is an Ineligible Deposit The contents of the deposit does not equal the deposit amount of the deposit, in U.S. dollars, as entered into the ATM; F. With respect to any deposit, item(s)of which total $2,500 or more, verify the contents to determine whether any of the irregularities described in Subsection E of this section and the following additional irregularities exist: An item does not contain required Restrictive Endorsement. An item contains an Obvious Alteration. An item is unsigned by the maker (except for items where a maker s signature is n ot required); An item is dated more than six (6) months prior to the date of its deposit (a stale item ) (see Section 11.4.B); A discrepancy exists between the numerical and written amounts. In this event, process the item according to the written amount. REVISED 06/14 Page 72

74 Section 11 DEPOSIT PROCESSING PROCEDURES G. In the event an ATM Owner receives a deposit of currency in excess of $3,500.00, it shall send the appropriate Card Issuer a deposit notification via DataNavigator with respect thereto reporting the following information by the end of the Credit Union Business Day following the Business Day on which the ATM Owner was required to process the related deposit: Cardholder number; Amount of currency deposited; ATM location; Transaction date; and Transaction time. The Card Issuer shall be responsible for complying with the applicable requirements of the Federal Bank Secrecy Act, and regulations promulgated thereunder, with respect to such deposit. H. The ATM Owner shall also send any currency, and any part of a deposit, specified in subsections E and F of this section to the appropriate Card Issuer by the end of the Credit Union Business Day following the Business Day on which the deposit was processed. (The foregoing requirement does not apply to discrepancies in deposit totals, numerical/written discrepancies and stale dated items.) Each such item shall be sent to the Card Issuer by any of the following methods: direct delivery, clearing house or correspondent exchange, or U.S. mail. I. The ATM Owner shall endorse in its name in accordance with the applicable legal requirements and send for presentment to the payor financial institution each item not sent to the Card Issuer as provided in subsection H of this section by the end of the Credit Union Business Day following the Business Day on which the deposit was processed. Except where the Payee s endorsement is required on the item by means of required Restrictive Endorsement, the Card Issuer assumes the risk for all missing endorsements ADJUSTMENTS A. The ATM Owner shall send an Adjustment to the appropriate Card Issuer with respect to each of the irregularities referred to in subsections E and F of Section 11.3 (other than items with numerical/written discrepancies and stale dated items) and with respect to any clearly fraudulent item. All Adjustments initiated by a CO-OP Network ATM Owner for transactions occurring between CO-OP Network participants must be processed via DataNavigator. ATM Owners that fail to comply with this requirement may be held liable as allowed by Subsection B of Section No Adjustment shall be sent for a difference of $5.00 or less, prior to assessing Adjustment fees. All Adjustments shall include the reason for the Adjustment as stated in Subsections E and F of Section 11.3 and specific information as to the contents of the envelope, as appropriate. Such Adjustment shall be sent by 10:00 a.m., terminal local time, on the Credit Union Business Day following the Business Day on which the deposit was processed. B. In the event an ATM Owner receives a deposit of a stale item, as referred to in Subsection E of Section 11.3, the ATM Owner shall send the appropriate Card Issuer a deposit notification through DataNavigator with respect thereto, and process the deposited item through clearing. Such notification shall be sent by 10:00 a.m., terminal local time, on the Credit Union Business Day following the Business Day on which the deposit was processed. REVISED 06/14 Page 73

75 Section 11 DEPOSIT PROCESSING PROCEDURES C. With respect to each of the irregularities referred to in subsections E and F of Section 11.3 and with respect to any clearly fraudulent item, the ATM Owner must retain a copy of both front and back of the item for a minimum of two (2) years and for such longer period as may be required by applicable federal, state, or local laws, rules or regulations NOTICE OF RETURN; ADJUSTMENTS A. In the event an item sent by an ATM Owner to the payor financial institution for presentment is returned to such ATM Owner for any reason, or such ATM Owner receives notice of non-payment of the item for any reason, such ATM Owner shall initiate return of the returned item to the Card Issuer. An Adjustment shall be sent as soon as practical, but no later than 10:00 a.m., terminal local time, of the Credit Union Business Day following the Business Day of receipt or notice of the returned item, whichever is earlier. The Adjustment shall include the reason for non-payment as set forth on the returned item or notice of non-payment received. The item should be returned as soon as practical, but no later than the end of the Credit Union Business Day following the Business Day of receipt or notice of the returned item and should include any additional supporting documentation received by the ATM Owner (e.g. affidavit of forgery). The returned item shall be sent to the Card Issuer by any of the following methods: direct delivery, clearing house or correspondent exchange, or U.S. mail. B. Redeposit of Returned Items If an ATM Owner authorizes a redeposit of returned items, they may incur a late Adjustment fee and a returned item fee. Additionally, if by redepositing the item(s), the ATM Owner has acted out of compliance with the deposit processing procedures, thereby causing a loss to the Card Issuer, the ATM Owner may be liable for the Card Issuer s loss CARD ISSUER COLLECTION The Card Issuer shall be responsible for notifying its Cardholder with respect to any returned item or notice of non-payment. In the event the Card Issuer is in a position of potential loss due to an inability to collect funds from the Cardholder and after reviewing the transaction history, it is determined that the ATM Owner was out of compliance with these ORRs, the Issuer must notify the ATM Owner in writing of the possible loss by the 30 th Business Day following of the date of the final exception action processed (as outlined in Appendix A) This in no way alleviates the Issuer s responsibility to continue to make every effort to collect the amount due from the Cardholder, but rather serves as a notice of possible loss to the ATM Owner ADDITIONAL DOCUMENTATION TO SUPPORT ADJUSTMENTS Adjustments processed by an Acquirer due to an irregularity in the amount deposited by the Cardholder may require evidence that Dual Control was in effect as outlined in Section A If, after making the required efforts to collect funds from a Cardholder as outlined in Section 11.6, the Issuer requires Evidence of Dual Control from the Acquirer, the Issuer must request the evidence within ninety (90) Business Days of receiving the initial Adjustment. The Acquirer shall provide a copy of the deposit envelope with Evidence of Dual Control within ten (10) Business Days or a copy of video footage demonstrating Dual Control within fifteen (15) Business Days from the date requested. The Acquirer may not charge fees for documentation or video demonstrating Dual Control. REVISED 06/14 Page 74

76 Section 11 DEPOSIT PROCESSING PROCEDURES 11.8 AUDIT TRAILS; RECORD RETENTION Each ATM Owner shall maintain sufficient audit trails with respect to deposits received to be able to provide pertinent information to the appropriate Card Issuer, and to match returned items with the original deposit. Each ATM Owner shall maintain such records for a minimum of two (2) years and for such longer period as may be required by applicable federal, state, or local laws, rules or regulations. Each Card Issuer gives CO-OP Financial Services or its duly authorized agents the right to audit the books and records which pertain to the receipt, processing and settlement of ATM deposits pursuant to these ORRs, at reasonable times during regular office hours. Card Issuer shall reimburse CO-OP Financial Services for its costs and expenses incurred for such an audit COMPLIANCE WITH LAW Each Member Institution shall be responsible for complying with any federal, state, or local law, rule or regulation related to the acceptance of deposits at ATMs LIABILITY A. Each Card Issuer shall indemnify and hold harmless each ATM Owner, and their officers, directors, employees, agents and any other third party associated with the performance of the ATM, against any and all claims, losses, costs, charges, liabilities or expenses (including reasonable attorneys fees) that are suffered as a result of the processing of a deposit transaction of a Cardholder of such Card Issuer by the ATM Owner in accordance with the provisions of this section. All liability under this section shall be limited to the amount of the transaction involved unless the ATM Owner to be indemnified is liable to a person or entity other than CU Cooperative Systems, Inc. or another member of CO-OP Network, in which event the liability under this Section shall be limited to the extent of the liability to such person or entity, together with reasonable attorneys fees. The foregoing indemnification shall be in addition to any indemnification provided elsewhere in these ORRs. B. In the event of non-compliance with the Deposit Processing Procedures, an ATM Owner shall be liable to a Card Issuer for losses incurred only when the act of compliance would have prevented the loss. Both the ATM Owner and Card Issuer must make reasonable efforts to recover all funds before liability is incurred. It is the intention of the parties that an ATM Owner shall be liable to a Card Issuer only in those circumstances where the failure to exercise ordinary care, under circumstances similar to the exercise of ordinary care by a teller in the offices of the Card Issuer, would have or should have avoided loss as a result of acceptance of counterfeit currency or an irregular item. This agreement shall be interpreted and construed with this purpose in mind. REVISED 06/14 Page 75

77 Section 11 DEPOSIT PROCESSING PROCEDURES C. Non-Compliance If a Member Institution or a Card Issuer consistently fails to follow the deposit procedures in this section, and any applicable governmental rules, procedures or regulations, the following action(s) will be taken by CO-OP Financial Services: The first failure to comply: CO-OP Financial Services shall give a written warning to the Member Institution. The second failure to comply: CO-OP Financial Services shall give a written warning to the Member Institution. The third failure to comply: A $ penalty will be charged to the Member Institution by CO-OP Financial Services. The fourth failure to comply: A $ penalty will be charged to the Member Institution by CO-OP Financial Services. The fifth failure to comply: CO-OP Financial Services may terminate or suspend, in its sole discretion, the participation of a Member Institution in the CO-OP Network deposit program until such time as the Member Institution agrees to follow the deposit procedures in this section, and any applicable governmental rules, procedures or regulations. NOTE: Waivers may be issued to credit unions experiencing system problems that affect compliance. D. Arbitration For dispute resolution procedures, see Section DELAYED AVAILABILITY OF FUNDS A. Card Issuer understands that the ATM Owner does not examine, segregate or report items deposited for the benefit of Card Issuers according to categories, which determine the availability of funds under federal and state laws. B. Card Issuer hereby holds ATM Owner, and their officers, directors, employees, agents and any other third party associated with the performance of the ATM, harmless and agrees to indemnify ATM Owners for any of their costs in defending any action and for damages arising from a claim based upon the delayed availability of funds under federal and state laws and the policies or procedures of the Card Issuer. REVISED 06/14 Page 76

78 Section 11 DEPOSIT PROCESSING PROCEDURES SCHEDULE OF FEES FOR DEPOSIT PROCESSING The ATM Owner accepting Foreign Deposits from other Card Issuers shall be compensated for the special handling of a deposit Adjustment according to the following fee schedule. (These fees are in addition to any applicable Adjustment fees): 1. For each adjustment initiated for a deposit as a result of a discrepancy based on subsections 11.3.E and 11.3.F of this section, the ATM Owner may impose a $2.00 handling fee at the time the Adjustment is processed. AND/OR- 2. For each Adjustment initiated for deposited items that were processed and subsequently returned, the ATM Owner may impose a $6.00 fee per item at the time the Adjustment is processed. NOTE: When multiple items are returned for one (1) deposit, one (1) Adjustment is to be performed with a $6.00 fee for each item returned. 3. For fees related to exception item processing through DataNavigator see Section 8, Invoice Policy and Fee Schedules. For fees related to deposit adjustments, chargebacks, representments or deposit notifications processed through CO-OP Financial Services see Section 8, Invoice Policy and Fee Schedules MEMBER INSTITUTIONS PROCESSING ADJUSTMENTS, CHARGEBACKS, REPRESENTMENTS AND DEPOSIT NOTIFICATIONS THROUGH CO-OP FINANCIAL SERVICES Member Institutions will be responsible for the accuracy of all information and completeness of forms given to CO-OP Financial Services for processing on its behalf. Any incomplete forms may be returned unprocessed. Forms may be faxed to CO-OP Financial Services. Valid requests received by 12:00 p.m. PT will be entered into DataNavigator the same Business Day. REVISED 06/14 Page 77

79 SECTION 12 COMPLIANCE Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

80 Section 12 COMPLIANCE COMPLIANCE 12.1 GOVERNMENT RULES AND REGULATIONS Card Issuer shall have sole responsibility for compliance with all applicable state and federal laws, rules, fees and regulations, including without limitation, usury laws, the Electronic Fund Transfers Act of 1978 and the Truth-In-Lending Act (and the error and dispute resolutions procedures specified in each), the Fair Credit Reporting Act, the Equal Credit Opportunity Act, and the regulations and interpretations promulgated there under (including Regs E and Z) and any subsequent amendments to such laws and regulations. In addition, with respect to credit processing, Card Issuer shall establish and be responsible for credit criteria, credit limits, interest rates, and other terms and conditions and compliance with all state and federal consumer laws and regulations applicable to credit card transactions. CO-OP Financial Services and ATM Owner (if different from the Card Issuer) shall have no responsibility for compliance with the error and dispute resolution procedures under Regs E and Z. Except as provided above, CO-OP Financial Services shall use its best efforts to maintain the Network in compliance with all governmental regulations applicable to it as a service provider provided, however, that CO-OP Financial Services shall be under no obligation to make enhancements to the Network which are not required, as determined by CO-OP Network in its sole discretion of CO-OP Financial Services, for compliance with changes in applicable laws or regulations. If, after the date of the Agreement, any modifications to the Network shall be required due to changes in various laws and regulations having authority over the Card Issuer's business, CO-OP Financial Services shall use its best efforts except to the extent such changes may be beyond the ability of implementation, to bring the Network into compliance with such modified laws and regulations. CO-OP Financial Services may, at its sole discretion, pass on, in whole or in part, on an equitable basis, to all Card Issuers affected by such modifications, any costs incurred by CO-OP Financial Services in connection with such modifications to the Network. Card Issuer shall have sole responsibility for compliance with the Funds Availability Act of 1994 and the regulations and interpretations promulgated there under (including Reg CC) and any subsequent revisions. CO-OP Financial Services and ATM Owner shall have no responsibility for compliance with Reg CC. Card Issuer shall provide all required notices to the appropriate regulatory authorities concerning the execution or termination of the Agreement or any substantial changes in the Network provided to Card Issuer hereunder. Any and all Card Issuer files maintained for the Card Issuer pursuant to this Agreement and the ORRs, shall be available for inspection by the appropriate regulatory authorities upon prior notice to CO-OP Financial Services CO-OP NETWORK ORRS A. If CO-OP Financial Services determines, in its sole and absolute discretion, that just cause exists, each Member Institution shall, at its own expense, conduct an audit to recertify to such portions of the ORRs as CO-OP Financial Services shall indicate. Such certification must be completed by the Processor s external auditor or internal auditor, provided that an internal auditor who certifies CO-OP Financial Services compliance shall not have operational responsibility related to the subjects covered by CO-OP Network ORRs and such compliance certification must be received by CO-OP Financial Services within a time frame reasonably set by CO-OP Financial Services. The recertification must also be certified by a senior officer of the Processor. REVISED 06/14 Page 79

81 Section 12 COMPLIANCE B. If the CEO of CO-OP Financial Services determines that there exists an imminent threat to the security or functionality of the system, including but without limitation to, failure of any Processor to comply with Section 12.2.A of the ORRs, which could result in substantial detrimental impact to CO-OP Network or any of its Members, Processors or any other Participant; the CEO of CO-OP Financial Services may, in consultation with the Chairman or Vice Chairman of the Board, suspend, until either a meeting of the Board of Directors as set forth in Section 12.2.D or the passage of four (4) calendar weeks, whichever occurs first, the provision by CO-OP Financial Services of any or all services to any or all Processors. C. Before undertaking any action described in Section 12.2.B, the CEO of CO-OP Financial Services shall take reasonable efforts to notify, in writing to the extent reasonably practical, the Members, Participants and Processors to be directly affected by such action. D. As soon as reasonably possible after the exercise of any power under Section 12.2.B above, the CEO of CO-OP Financial Services shall conduct a meeting of the Board of Directors to consider the continuation, modification or cancellation of any actions taken by the CEO under Section 12.2.B. E. The CEO, Chairman of the Board, Directors, agents, employees or officers of CO-OP Financial Services shall not incur any liability to any Member or Processor or any other person or entity by virtue of any action taken pursuant to Sections 12.2.B, 12.2.C and 12.2.D. F. Any Processor that fails to comply with any or all of the requirements contained in Section 12.2 will be subject to a penalty of $10,000 (U.S.) for each month or partial month until such violation(s) are certified as corrected pursuant to Section 12.2.A; provided, however, that if the Board, in its sole and absolute discretion, elects to waive compliance by any Processor with any requirement contained in Section 12.2, such penalty shall not accrue in connection with such Processor s failure to comply with such requirement for the period specified by the Board of Directors NATIONAL CREDIT UNION ADMINISTRATION (NCUA) COMPLIANCE CO-OP Financial Services and all subsidiaries will provide information to NCUA and the state supervisory authority, as applicable, on an annual basis as required under NCUA Regulation 712.3(d)(4) when the agency s reporting system is fully operational. REVISED 06/14 Page 80

82 SECTION 13 INDEMNIFICATION & LIMITATION OF LIABILITY Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

83 Section 13 INDEMNIFICATION & LIMITATION OF LIABILITY INDEMNIFICATION & LIMITATION OF LIABILITY CO-OP Financial Services will use its best efforts to ensure that the Switch is available twenty-four (24) hours a day, seven (7) days a week except for maintenance, conversions, malfunctions, adverse power or abnormal conditions. However, CO-OP Financial Services cannot and does not guarantee such availability. Accordingly, the sole liability of CO-OP Financial Services to Card Issuers, ATM Owners or to any third party for claims, notwithstanding the form of such claims (e.g., contract, negligence or otherwise), arising out of the delay or interruption of the services provided or to be provided hereunder shall be to commence or resume the Network as promptly as reasonably practical. Except to the extent set forth below, the sole liability of CO-OP Financial Services to Card Issuers, or any ATM Owners or to any third party for claims and incidents, notwithstanding the form of such claims or incidents (e.g., contract, negligence or otherwise), arising out of the negligence of CO-OP Financial Services in providing the Network or processing transactions under the Agreement, shall be to use its best efforts to furnish the correct report and/or to correct the applicable Card Issuer files or correct the data transmitted, provided that the Card Issuer or ATM Owner promptly advises CO-OP Financial Services of such claim or incident in accordance with CO-OP Network procedures. The sole liability of CO-OP Financial Services under this Agreement for money damages resulting from claims made by the Card Issuer, or any ATM Owner or any third party arising from or related to the Network or processing transactions shall be limited to the following losses (listed in A-C below) caused solely by: 1. The negligence of CO-OP Financial Services in failing to service properly, maintain, program or operate the CO-OP Network Switch. 2. Any misconduct or negligence of officers, employees or agents of CO-OP Financial Services in providing the Network in accordance with the then prevailing operating procedures of CO-OP Network: A. The amount of cash erroneously dispensed at an ATM. B. The loss of funds resulting from amounts erroneously transferred from an ATM User's account to a third party; and/or C. The loss of funds resulting from amounts erroneously transferred from an ATM User's account to an incorrect third party. CO-OP Financial Services shall not be liable for loss of funds resulting from fraudulent means or the negligence or misconduct or other acts of third parties including, without limitation, fraudulent means used at ATMs or POS terminals, stolen access devices, PINs, passwords. Card Issuer agrees to cooperate with CO-OP Financial Services, at the direction and expense of CO-OP Network, in taking all steps necessary to recover any erroneously dispensed cash and any monetary loss resulting from the amounts erroneously transferred for which CO-OP Financial Services is liable in accordance with this section. Card Issuer shall indemnify and hold CO-OP Financial Services harmless from all damages incurred by CO-OP Network, including reasonable attorneys' fees, as the result of the fraud, negligence or other action by the Card Issuer or its officers, directors, employees or agents. All Member Institutions shall indemnify and hold CO-OP Financial Services harmless from personal injury liability, if any, in connection with the use or operation of an ATM or POS Terminal by an ATM user. REVISED 09/13 Page 82

84 Section 13 INDEMNIFICATION & LIMITATION OF LIABILITY As a condition precedent for liability of CO-OP Network for any monetary loss under this Section, Card Issuer shall promptly notify CO-OP Financial Services of any event giving rise to liability, in particular, but not limited to the loss of cash or any item (i.e., checks, drafts or other negotiable instrument) or access device or PIN or password for which notice shall be given to CO-OP Financial Services not later than midnight of the Card Issuer Credit Union Business Day following the date the event was discovered and in all events not more than one hundred and twenty (120) calendar days after the occurrence of the event. Card Issuer shall indemnify and hold CO-OP Financial Services harmless from any and all claims, incidents, liabilities or losses, including costs and attorneys' fees, incurred by CO-OP Network resulting from: 1. Transactions affected in any ATM or POS with access cards/devices issued by the Card Issuer in response to a fraudulent request; 2. Transactions affected with lost, stolen, counterfeit or misused access devices/cards issued by, or on behalf of, Card Issuer to allow customers of Card Issuer to access the services; 3. Transactions affected in contravention of terms or restrictions placed on the use of the access devices/cards; 4. The unauthorized or negligent use of the Marks by Card Issuer; and/or 5. Actions or omissions of Card Issuer agents and Third Party host Processors relating to the services, including, without limitation, fraud and negligence. The indemnity provided for in this Section shall not be applicable to losses caused solely by: 1. The negligence of CO-OP Financial Services in failing to properly service, maintain, program or operate CO-OP Network Switch; or 2. Any misconduct or negligence of the officers, employees, or agents of CO-OP Financial Services in performing the services in accordance with the then prevailing operating procedures. Under no circumstances will CO-OP Financial Services be liable for, or be deemed in default as a result of, any delay or failure to perform under the Agreement or the ORRs or for any interruption in the services resulting, directly or indirectly, from any cause beyond the reasonable control of CO-OP Financial Services. IN NO EVENT WILL CO-OP FINANCIAL SERVICES BE RESPONSIBLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHICH CARD ISSUER OR AN ATM OWNER OR MEMBER INSTITUTION MAY INCUR OR EXPERIENCE AS A RESULT OF ENTERING INTO OR RELYING ON THE AGREEMENT OR THESE ORRS EVEN IF CO-OP FINANCIAL SERVICES HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. REVISED 09/13 Page 83

85 SECTION 14 EARLY TERMINATION FEE AND EVENTS OF DEFAULT Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

86 Section 14 EARLY TERMINATION FEE AND EVENTS OF DEFAULT EARLY TERMINATION FEE AND EVENTS OF DEFAULT 14.1 EARLY TERMINATION FEE An Early Termination Fee as set forth in Section 14.3 below, shall be paid by Member Institution upon the early termination of the Agreement, or a product or service, for any of the following reasons ( Early termination fee ): A. Member Institution terminates the Agreement or any product or service under the Agreement prior to expiration of the then-current term of the Agreement; or B. CO-OP Financial Services terminates the Agreement as a result of a default by Member Institution under the Agreement. A default under the Agreement by Member Institution shall include, but not be limited to, the following events: 1. Member Institution fails to become operational on CO-OP Network within one hundred and eighty (180) calendar days of the effective date of the Agreement pursuant of the terms of the Agreement; 2. Member Institution fails to become operational on any contracted CO-OP Financial Services products or services to which these ORRs apply within one hundred and eighty (180) calendar days of the effective date of the Agreement for that product or service pursuant to the terms of the Agreement; 3. Member Institution s failure to pay any sum of money due hereunder including monies due in accordance with the ORRs; when due; 4. Member Institution s failure to perform any of its other obligations under the Agreement, or any of its other agreements with CO-OP Financial Services; 5. Member Institution committing an act of bankruptcy or become the subject of any proceeding under the Bankruptcy Code or become insolvent, or if any substantial part of the Member Institution s property becomes subject to any levy, seizure, assignment, application or sale for or by any creditor or governmental agency or conservatorship, receivership or liquidation proceedings are commended with respect to Member Institution or an assignment for the benefit of creditors with respect to Member Institution; 6. Member Institution consolidating with or merging into or being merged with, any other corporation or conveying transferring or leasing its properties and assets substantially in its entirety to any person or entity; or 7. Member Institution becomes ineligible for membership as a regular or associate member under the CU Cooperative Systems, Inc. bylaws. C. Member Institution agrees that the Early Termination Fee is a reasonable estimate of potential losses that (i) CO-OP Financial Services would incur, (ii) are otherwise difficult or impossible to estimate, and (iii) are not intended as a penalty. Any termination of Member Institution s agreement shall not release Member Institution from paying any fees or expenses owed to CO-OP Financial Services. In the event of any termination of Member Institution s agreement with CO-OP Financial Services, all obligations owed by Member Institution to CO-OP Financial Services for services provided or transactions occurring prior to the effective date of termination and the Early Termination Fees shall become immediately due and payable. REVISED 09/13 Page 85

87 Section 14 EARLY TERMINATION FEE AND EVENTS OF DEFAULT 14.2 CO-OP FINANCIAL SERVICES RIGHTS UPON DEFAULT BY MEMBER INSTITUTION In the event a default by Member Institution, CO-OP Financial Services may immediately terminate the Agreement and declare all amounts due, and to become due, including the Early Termination Fee, immediately due and payable DETERMINATION OF EARLY TERMINATION FEE AND CALCULATION Member Institution shall pay an Early Termination Fee for the remaining term of the Agreement determined as follows: the highest average monthly support and switch fees ( Average Monthly Fee ), less pass through and one-time non-recurring fees, as stated in the support invoice and/or institution fee summary report provided to Member Institution for a consecutive six (6) month period during the twelve (12) month period immediately preceding the Termination Date and adjusted for a projected growth over the remaining term of the Agreement as follows ( Growth Adjustment ): multiply the Average Monthly Fee by the following percentages, as applicable: 3% for the first twelve (12) month period following the Termination Date, 4% for the second twelve (12) month period following the Termination Date and 5% for the remaining term of the Agreement. The Termination Date is defined as the earliest of the following: the date CO-OP Financial Services receives written notice of early termination from the Member Institution (if termination is due to Section 14.1.A above, or the date of termination provided by CO-OP Financial Services (if termination is due to Section 14.1.B above), or the actual date the Network is no longer available to the Member Institution. In the event termination is pursuant to Section 14.1.B.1 or 2, the early termination fee shall be as stated in the Agreement or an Amendment thereto and the Early Termination Fee calculation provided for in this Section 14.3 shall not apply. All other provisions of this Section 14 shall apply to such early termination. REVISED 09/13 Page 86

88 Section 14 EARLY TERMINATION FEE AND EVENTS OF DEFAULT EXAMPLE OF EARLY TERMINATION FEE CALCULATION The following is an example for calculating the Early Termination Fee using a remaining Agreement term of five (5) years after the Termination Date and the Average Monthly Fee equaling $6,000: Average Monthly Fee Calculation and Early Termination Fee Prior to Growth Adjustment A. Total highest consecutive six (6) months of monthly support and switch fees during the twelve (12) month period immediately preceding the Termination Date $36,000 B. Divide A by 6 = Average Monthly Fee $6,000 C. Multiply line B times the total months remaining on contract = total base termination fees (example = 60 months) $360,000 Growth Adjustment Calculation D. Multiply line B times 3% times 12 (1st 12 months growth adjustment) $2,160 E. Multiply line B times 4% times 12 (2nd 12 months growth adjustment) $2,880 F. Multiply line B times 5% times the months remaining, after adjustments 1 and 2 (example = 36 months) $10,800 G. Add lines D, E and F = Total Growth Adjustment $15,840 H. Total Early Termination Fee (sum of lines C and G) $375,840 Additional Fees* I. One-time de-conversion fee (per application termination) $2,500 J. Total Early Termination Fee and De-conversion Fee Due (sum of lines H and I) * Pursuant to Section 8 of these ORRs, additional fees may be charged. $378, DE-CONVERSION FEE In addition to the Early Termination Fee, upon termination of the Agreement for any reason, Member Institution shall pay a one-time de-conversion fee of: A. $1,500 for termination of an Agreement under 14.1.B.2 above; or B. $2,500 for termination of an Agreement under 14.1.A, 14.1.B.1 and 14.1.B.3 through 14.1.B.7. If the Member Institution continues to participate under contract in the Network as a Network Access participant, the one-time fee of $2,500 under 14.4.B above may be waived and the initial set-up fee of $2,500 for Network Access membership may be waived. REVISED 09/13 Page 87

89 Section 14 EARLY TERMINATION FEE AND EVENTS OF DEFAULT 14.5 FEE COLLECTION The Early Termination Fee and De-conversion Fee will be collected via ACH two months prior to the Termination Date unless otherwise agreed to or deemed necessary at the sole discretion of CO-OP Financial Services REMEDIES The remedies contained in this Section 14 are cumulative and are in addition to all other rights and remedies available to CO-OP Financial Services under the Agreement, by operation of law or otherwise. REVISED 09/13 Page 88

90 SECTION 15 MISCELLANEOUS Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

91 Section 15 MISCELLANEOUS MISCELLANEOUS 15.1 EXCUSED PERFORMANCE Neither party shall be liable for any delay or failure in its performance of any of the acts required by the agreement when such delay or failure arises from causes beyond the control and without the fault or negligence of such party. For purposes of the agreement, an excused performance event or "cause beyond the control" of a party include, without limitation, acts of God, acts of public enemies, material or component shortages, embargo, rationing, acts of local, state or national government or public agencies, utility and communication failures or delays, fire, flood, earthquakes, epidemics, riots or strikes. If CO-OP Financial Services is unable to provide service in any area because of an excused performance event, the Member Institution may secure temporary service from another source for said area until the Member Institution is able to resume such service. During the period of such temporary service, the Member Institution will not be obligated to pay CO-OP Financial Services for service that CO-OP Financial Services is unable to provide. The party claiming an excused performance event as an excuse for non-performance, as a condition to excusing performance, must notify the other party within five (5) Business Days of the event of the reason for non-performance and the expected time that service will be resumed. If the service is not, or will not be expected to resume within sixty (60) calendar days of the event, the Member Institution may, upon notice to CO-OP Financial Services terminate this Agreement ENTIRE AGREEMENT The Member Institution acknowledges that it has not been induced to enter into this Agreement by any representation or warranty not set forth in the Agreement or the ORRs. The Agreement and the ORRs contain the entire agreement of the parties with respect to its subject matter and supersede all existing agreements and all other oral, written or other communications between them concerning its subject matter. The Agreement and the services and procedures covered by the Agreement may be modified by CO-OP Financial Services and such modifications shall be effective upon thirty (30) calendar days prior written notice given to the Member Institution by CO-OP Financial Services except in the case of emergency rules or circumstances beyond our control ASSIGNMENT The Agreement may not be assigned by the Member Institution, in whole or in part, without the prior written consent of CO-OP Financial Services. The Agreement and these ORRs shall be binding upon and shall inure to the benefit of CO-OP Financial Services and Member Institution and their respective successors and permitted assigns. REVISED 09/13 Page 90

92 Section 15 MISCELLANEOUS 15.4 SEVERABILITY If a provision or portion of the Agreement or these ORRs is capable of two (2) constructions, one of which would render it void and the other of which would render it valid, then the provision shall have the construction which renders it valid. If any provision or portion thereof of the Agreement is determined by a court decision, administrative rule or other governmental tribunal or agency to be invalid, illegal, void or unenforceable by reason of any rule of law, administrative or judicial provision or public policy, and such provision or portion is not material to the Agreement, all other provisions of the Agreement shall nevertheless remain in full force and effect. If any provision of the Agreement which is determined as aforesaid to be unenforceable and is determined to be material to the Agreement, the parties shall in good faith negotiate and attempt to reach an agreement on a substitute provision which will give each party the economic equivalent of what it may have lost by the determinations NOTICES All notices, requests and approvals required by the Agreement (other than routine operational communications) shall be in writing and shall be deemed duly delivered when (i) delivered by hand; (ii) one day after being given to a nationally recognized overnight delivery service with a reliable system for tracking delivery; (iii) when sent by confirmed facsimile with a copy sent by another means specified in this notice provision; (iv) when sent by through a reliable delivery service that provides confirmation of delivery with the original sent by another means specified in this notice provision; or (v) three (3) days after being sent First Class Mail by United States Mail, postage prepaid and addressed to the party at the address or facsimile number for the receiving party below or the address designated by the receiving party as an address for receiving notices under the Agreement, or such other address or facsimile number or address as may be provided by a party in accordance with this notice provision. Each party shall advise the other party of its facsimile number and address and of any change in its delivery address including its facsimile number and address within three (3) business days of any change in that address or number. Member Institution understands and agrees that the nature of the Services will require routine day-to-day operational notices directly between Member Institution and CO-OP Financial Services and Member Institution agrees to the direct notice arrangement between Member Institution and CO-OP Financial Services AUTHORIZATION The individuals executing the Agreement on behalf of CO-OP Financial Services and the Member Institution do each hereby represent and warrant that they are duly authorized by all necessary action to execute the Agreement on behalf of their respective principals CONTINUING OBLIGATIONS The obligations of CO-OP Financial Services and the Member Institution under the Agreement and these ORRs including, without limitation, those relating to Confidential Information and the Member Institution s files and those relating to limitation of liability and indemnification shall survive termination of the Agreement and these ORRs. REVISED 09/13 Page 91

93 Section 15 MISCELLANEOUS 15.8 LICENSE TO USE COPYRIGHTED MATERIALS Subject to the terms and conditions set forth herein, CO-OP Financial Services hereby grants to the Member Institution and the Member Institution hereby accepts a personal, non-exclusive, non-divisible right and license to reproduce and distribute, in such a manner prescribed by CO-OP Financial Services from time to time, any copyrighted advertising, promotional and other written materials produced by or for CO-OP Financial Services ( Marks ) in connection with programs and services in which the Member Institution participates. The Member Institution agrees to include copyright notices on such materials in the precise form as set out in such materials provided by CO-OP Financial Services and to include proper copyright notices on any other material disseminated by the Member Institution when so directed by CO-OP Financial Services. Upon termination of the Member Institution s agreement, the Member Institution s rights to use the Marks shall immediately terminate. The Member Institution shall promptly take such action as shall be reasonably required by CO-OP Financial Services under the ORRs, or otherwise to discontinue use of the Marks WAIVERS The CEO of CO-OP Financial Services may, when appropriate and necessary, waive any provision of requirement in the ORRs, at his/her discretion, for up to twelve (12) months. Such a waiver must be made in writing and retained for reference by all related parties. REVISED 09/13 Page 92

94 SECTION 16 COMMITTEES Operating Rules and Regulations without the prior written permission of CO-OP Financial Services. All Rights Reserved

95 Section 16 COMMITTEES COMMITTEES 16.1 OPERATIONS ADVISORY COMMITTEE The Operations Advisory Committee (OAC) is intended to represent the interest of Member Institutions regarding but not limited to operational issues, deposit processing procedure, and new product development of CO-OP Financial Services. A. Member Appointment Recommendations for consideration for membership on the OAC shall be reviewed and approved by CO-OP Financial Services management. The OAC will consist of fifteen (15) members representing the range of Member Institutions by geographic location, credit union size and processing type. B. Absences Members of the OAC with more than one (1) absence per calendar year or two (2) consecutive absences are subject to disqualification and may be dismissed from the OAC. C. Substitutions In the event an OAC member is not able to attend a scheduled meeting, substitute representatives are not permitted. In the event an OAC member is permanently unable to serve on the OAC, that member (or credit union representative) may suggest a replacement by submitting a recommendation in writing to CO-OP Financial Services Management. D. Meetings OAC meetings will be on a periodic basis as determined by CO-OP Financial Services Management. The OAC shall be empowered to act upon a quorum; defined as two thirds (2/3) of the current membership and by a majority vote of those voting CLAIMS REVIEW COMMITTEE The Claims Review Committee is a subcommittee of the OAC. Members of the Claims Review Committee shall be current OAC members and shall be appointed by a vote of the OAC. The Claims Review Committee shall be comprised of three (3) members and two (2) alternate members. A. Claims Review Specifics of a pending claim shall be presented in writing along with all documentation supplied by the parties to the Claims Review Committee by the management of CO-OP Financial Services. Any Claims Review Committee member, who is an officer, member, or employee of a Member Institution involved in a pending claim dispute shall be disqualified from participating in the resolution of such claim. The Claims Review Committee shall be empowered to act upon a quorum of three (3) persons, and by a majority vote of those voting. The management of CO-OP Financial Services will not be permitted to vote with the Claims Review Committee. The decision of the Claims Review Committee shall be final. B. Meetings Claims reviewed by the Claims Review Committee will be held in response to submitted claims but not more frequently than once per month. REVISED 09/13 Page 94

96 Section 16 COMMITTEES 16.3 CO-OP TECHNOLOGY COMMITTEE The CO-OP Technology Committee (CTC) is intended to represent the interest of Member Institutions regarding but not limited to the advancement of technology solutions that enhance the credit union movement. A. Member Appointment Recommendations for consideration for membership on the CTC shall be reviewed and approved by CO-OP Financial Services management. The CTC will consist of fifteen (15) members representing the range of Member Institutions. B. Absences Members of the CTC with more than one (1) absence per calendar year or two (2) consecutive absences are subject to disqualification and may be dismissed from the CTC. C. Substitutions In the event a CTC member is not able to attend a scheduled meeting, substitute representatives are not permitted. In the event a CTC member is permanently unable to serve on the CTC, that member (or credit union representative) may suggest a replacement by submitting, a recommendation in writing to CO-OP Financial Services Management. REVISED 09/13 Page 95

97 APPENDIX A EXCEPTION ITEM PROCESSING Operating Rules and Regulations Copyright 2015 CO-OP Financial Services without the prior written permission of CO-OP Financial Services. All Rights Reserved