Deposit Account Services Addendum
This Addendum governs your use of the Deposit Account Services, as defined below. Use of the Deposit Account Services is subject to all terms and conditions of this Deposit Account Services Addendum, the Agreement and your Order Form. Capitalized terms not otherwise defined herein have the meaning assigned to them under the Agreement.
1. Deposit Account Services.
As set forth in the Order Form, ModernRails shall provide Customer or Users with the ability to establish the following Deposit Account types: (i) non-interest bearing demand deposit accounts (“Demand Deposit Accounts”); (ii) interest-bearing demand deposit accounts (“Interest Checking Accounts”) or (iii) interest-bearing deposit accounts (“Savings Deposit Account”) (collectively, “Deposit Accounts”).
1.1
Ledger. ModernRails shall provide ledger services to track balances for each User’s Deposit Account.
1.2
FDIC Insurance. Deposit Accounts may qualify for FDIC deposit insurance (“FDIC Insurance”) as permitted by financial institution partner and their FDIC program including its partnership with Intrafi Network.
1.3
Interest Checking Account. If Interest Checking Accounts are selected on the Order Form, such accounts shall earn periodic interest as specified in Customer’s Specification Sheet, which may be subject to review and recalculation from time to time. Such interests shall be compounded daily based on the actual number of days in any given year, which shall be credited to the respective Interest Checking Account on a monthly basis. The annual percentage yield (“APY”) applied to the Interest Checking Account shall be defined in Customer’s Order Form, but ModernRails reserves the right to increase or decrease the APY at its sole discretion at any time. ModernRails also reserves the right to determine the minimum APY percentage to be provided to Users.
1.4
Savings Deposit Account. The Savings Deposit Account shall earn periodic interest as specified in Customer’s Specification Sheet, which may be subject to review and recalculation from time to time. Such interests shall be compounded daily based on the actual number of days in any given year, which shall be credited to the respective Savings Deposit Account on a monthly basis. The APY applied to the Savings Deposit Account shall be defined in Order Form, but ModernRails reserves the right to increase or decrease the APY at its sole discretion at any time. ModernRails also reserves the right to determine the minimum APY percentage to be provided to Users.
1.4.1
Withdrawal Limitation. Savings Deposit Accounts are regulated by Regulation D (12 C.F.R. Part 204), which imposes among other obligations, restrictions limits to six (6) withdraws and/or transfers per calendar months that shall be complied with at all times. Any attempt to transfer or withdraw funds after the sixth (6th) transfer or withdrawal in the same calendar month will be blocked. ModernRails reserves the right to temporarily remove the aforementioned withdrawal cap in accordance with applicable law, regulation, or regulatory guidance.
1.5
Transactions Services. ModernRails may provide to Customer and its Users, in connection to the Deposit Account services, one or more of the Transaction Services as defined in the Transaction Services Addendum and elected in the Order Form.
1.5.1
Overdraft. ModernRails may refuse to process any transaction request if the associated Deposit Account does not have a sufficient balance to cover such request. In case any Deposit Account has a negative balance of (i) three hundred dollars ($300) or more, ModernRails may reconcile the negative balance and close the Deposit Account immediately and (ii) less than three hundred dollars ($300) and such negative balance remains negative for thirty (30) calendar days, ModernRails may reconcile the negative balance and close the Deposit Account on the thirtieth (30th) day. ModernRails may, at its discretion, as part of the account reconciliation, collect such negative balance amount from Customer’s Reserve Account, as Customer is liable for its User’s negative balance.
1.6
APY Tiers & APY Splitting. If applicable, Customer may have different APY tiers for User Savings Accounts or Interest Checking Accounts, corresponding APY rates defined in an Order Form or as subsequently updated in the Specification Sheet. On the Specification Sheet, the Parties shall decide the APY tiers and whether and which Users will be able to open Savings Accounts or Interest Checking Accounts under the established tiers. Customer may split the APY that is applied to Interest Checking or Savings Accounts with Users, in which case Customer shall receive its percentage of the APY as a rebate and the remainder of the APY shall be paid to the Users as interest. Customer understands that ModernRails shall determine the minimum amount of APY that must be applied to Users with Interest Checking or Savings Accounts and that such minimum amount may result in no rebate for Customer. Any APY split shall be reflected on the Specification Sheet.
1.7
Subnet Services. If elected on the Order Form, ModernRails may provide Customer and its Users Deposit Accounts with virtual account and routing numbers to enable FedNow, Wire and ACH Services in connection with such Deposit Accounts as defined in the Transaction Services Addendum (“Subnet Services”). Customer shall inform Users that funds credited to a Deposit Account via the Subnet Services may not be immediately available for use.
1.8
Transactions between Deposit Accounts Services. ModernRails may provide Customer and its Users with services to allow for transfers between Customer and/or Users Deposit Accounts, as defined and detailed in the Specification Sheet.
1.9
Informational Tax Reporting. ModernRails shall provide or require Customer to provide Users with the state and federal income tax information reporting applicable to the User’s Deposit Account.
2. Account Agreements, Statements, Disclosures, and E-SIGN.
As required by applicable law, the Parties agree with the following:
2.1
Account Agreements. ModernRails shall provide to Customer the applicable user account agreements governing the use of the Deposit Accounts (“Account Agreements”), and Customer shall ensure that (i) each User agrees and accepts such Account Agreements by “checking the box;” and that (ii) Customer maintain records of such acceptance for at least six (6) years after the User’s Deposit Account is closed. Customer shall not take any action that interferes with or contravenes either ModernRails or the Financial Institution’s obligations and rights under an Account Agreement.
2.2
Account Statements. ModernRails may require that Customer be responsible for delivering the appropriate Account Statements to Users.
2.3
Appropriate Disclosures. Customer shall provide to Users all the disclosures and information prescribed by ModernRails or by applicable law or the Integration Requirements, including, but not limited, to Regulation E (12 C.F.R.§1005),Regulation D (12 C.F.R. §204) and Regulation DD (12 C.F.R. §1030).
2.4
E-SIGN Compliance. Customer shall ensure its Users qualify for receipt of electronically delivered Account Agreements, Account Statements and Account Disclosures in accordance with the Electronic Signature Electronic Signatures in Global and National Commerce Act (“E-Sign Act”) and other applicable law, and obtain Users consent to receive such Account Agreements, Account Statements and Account Disclosures electronically. Customer shall also maintain records of such consents accurately and that such records are accessible to Users for the period required by applicable law.
2.5
Updates. ModernRails may provide Customer with updates or additional provisions (“Updates”) to Account Agreements, Account Statements or Account Disclosures from time to time. Customer shall ensure such Updates are delivered to Users within the timeframe defined by ModernRails. Such Updates may include but are not limited to updates regarding APY changes, as permitted herein.
3. Use of Services.
3.1
Customer represents that it shall not use, or allow its Users to use, the Deposit Account Services in a way that may violate the applicable law or for any illegal purposes.
3.2
Customer shall adopt commercially reasonable processes and procedures to resolve errors and to assist Users in resolving errors in connection with the Deposit Account Services as required by applicable law, including, but not limited, to the Integration Requirements.
3.3
Customer shall provide commercially reasonable assistance to ModernRails in recovering any amount from Users that are due to ModernRails, including, but not limited, the collection of a negative balance in User accounts. Customer acknowledges that it is liable for any negative balance in its Users’ Deposit Accounts and that ModernRails may collect such amount from Customer’s Reserve Account at any time.
3.4
Customer acknowledges that it is responsible for ensuring its own compliance with all applicable laws as it relates to Customer’s use of the services provided in this Addendum and its provision of such service to its Users. Customer shall indemnify and hold ModernRails harmless from and against all liability of any kind of nature whatsoever, losses, or third-party claims arising from or related to (i) Customer’s violation of its obligations, representations or warranties as provided in this Addendum, (ii) information or data submitted (or not submitted) ModernRails by Customer or by or on behalf of a User (including but not limited to incorrect, illegal, improper records, instructions or data, or Customer’s technical errors), or (iii) User’s misuse of services or violation of applicable laws and regulation, including in relationship to transactions that do not originate from Customer’s services. This limitation of liability and indemnification provision is in addition to those found in the Agreement.
4. Relationship to Agreement.
All terms and conditions of the Agreement shall remain in full force and effect. In the event of any conflict of this Addendum and the terms and conditions of the Agreement, the terms and conditions of this Addendum shall prevail as related to the subject matter hereunder.