First Federal of Northern Michigan Online Electronic Services Agreement

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First Federal of Northern Michigan Online Banking Services Agreement

This Agreement contains important information regarding your rights and obligations as a user of First Federal of Northern Michigan's (the "Bank") online banking service and bill pay service ("Services"). It also describes the rights and obligations of the Bank. By requesting and using one of these Services, you agree to comply with the terms and conditions of this Agreement. We may also introduce new services for online banking from time to time. By using any new service, you agree to be bound by the rules that will be made available to you concerning the service.

PLEASE READ THIS AGREEMENT CAREFULLY AND KEEP A COPY FOR YOUR RECORDS. THIS AGREEMENT APPLIES TO BOTH CONSUMER AND COMMERCIAL CUSTOMERS UNLESS STATED.

Modifications to This Agreement

The Bank may modify the terms and conditions applicable to the Services from time to time. We will notify you of any changes by mail, by electronic mail message (e-mail), or upon accessing the Services. The revised terms and conditions will be effective at the earliest date allowed by applicable law. We are not required to give you prior notice where an immediate change is necessary to maintain or restore the security of our system. We reserve the right to terminate this Agreement and your use of the Services, in whole or in part, at any time.

Other Agreements

In addition to this Online Banking Services Agreement, you and the Bank agree to comply with the requirements of the agreements applicable to each of your accounts. Your use of the Services is your acknowledgment that you have received these agreements and intend to be bound by them. You should also review all other disclosures you received when you opened your accounts with the Bank, including the disclosed fees that may be imposed on your account(s).

Definitions

The following definitions apply in this Agreement:

"Services" refers to the online banking service and bill pay service.

"Account" means any First Federal of Northern Michigan account you have access to using the Services.

"We", "us", "our", and "Bank" refer to First Federal of Northern Michigan, which offers the Services and which holds the accounts accessed by the Services.

"You" and "your" refer to each account holder.

"Business Day" means Monday through Friday, excluding Saturday, Sunday, and federal banking holidays.

Access to Services

You can gain access to your account through the use of your Internet-enabled device, your Internet Service Provider, your User ID, your Password, and additional security questions that you establish.

You are responsible for obtaining, installing, maintaining, and operating all equipment used for the Services. The Bank will not be held responsible for any error or failure caused by the malfunction of your computer or other Internet-enabled device.

Hours of Operation

Services are available 24 hours a day, seven days a week, except during special maintenance periods. For transaction purposes, the Bank's business days are Monday through Friday, excluding federal banking holidays.

Online Banking Internal Transfer Cutoff Time

Express Transfers - Express transfers are memo posted to your account and immediately available.

Current Day Transfers - Online banking transfer transaction requests received before the transfer cutoff time of 7:00 p.m. Eastern Standard Time ("EST") on a business day will post to your account on the same day. Transaction request received after the 7:00 p.m. EST cutoff time or which are requested on Saturdays, Sundays, or federal banking holidays will be processed on the next business day.

Bill Pay Banking Transaction Cutoff Time

Bill pay processing cutoff time is 3:00 p.m. EST on a business day. Bill pay requests received after 3:00 p.m. EST on business days or on Saturdays, Sundays or federal banking holidays will be processed on the next business day. Payments made by electronic funds transfer will generally be posted to your account on the day the transaction is processed by the Bank's bill pay service provider. Payments made by check will be posted to your account on the day the Bank receives the debit through the standard check clearing process.

Electronic Mail

You agree that the Bank may respond to you by electronic mail (e-mail) with regard to any matter related to the Services, including responding to any claim of unauthorized electronic funds transfer that you make. Any e-mail sent to you by the Bank will be considered received by you within three (3) days of the date it was sent, regardless of whether or not you sign on to the Service(s) within that time frame.

If you send an e-mail message to the Bank, we will consider it received on the following business day. You agree that the Bank will have a reasonable amount of time, not to exceed 24-hours from the time considered received, to act on your e-mail message.

E-mail may not be used to initiate transactions on your account. You also should not rely on e-mail if you need to communicate with the Bank immediately (for example: to report an unauthorized transaction from an account or to stop a payment that is scheduled to occur).

E-mail is generally unsecured. Do not send personal or financial information via unsecured email. If you have a question or an issue which involve personal or financial information contact us by phone or through the secure online Services contact link.

Protecting Your User ID and Password

When you register for online banking, you will be issued an ID and temporary password. You will be required to set up a new password and security questions the first time you sign onto online banking. To be valid, your password must be between 6 and 10 characters in length and a combination of alpha-numeric characters. You will also be asked to establish an authentication image and security questions for layered authentication security.

All transactions initiated with your password and User ID will be attributed to you. You should treat your password with the same confidentiality as your ATM personal identification number ("PIN") and other personal financial information. You agree not to allow anyone to gain access to your online banking account, or to let anyone know your password used with these Services. You agree to assume responsibility for all transactions conducted with your password and User ID, up to the limits allowed by applicable law.

You may change your password at any time. For your protection, your password will expire every 90 days.

Insufficient Fund Fees

Funds must be available in your account on the scheduled payment date. If your account does not have sufficient funds to make a payment as of the date the transfer or payment is to be made, an insufficient fund fee will be charged to your account for each insufficient item based on the Bank's current fee schedule. The Bank shall have no obligation or liability if it does not complete a transfer or payment because there are insufficient funds in your account to process a transaction.

Online Banking and Bill Pay Fees

The Bank offers the benefits and convenience of the Services to you free of charge. Other service fees may apply as disclosed in the information you received when you opened your account.

ONLINE BANKING SERVICE

The online banking service allows you to view your account information, print temporary statements, transfer funds between your checking accounts, savings accounts, and money market accounts, transfer funds to make loan payments, place stop payments, print statements and export information.

Transfers between your First Federal of Northern Michigan accounts that you initiate online are processed as follows:

Express Transfers:

One time transfer requests that you initiate prior to the Bank's night time processing on any business day will immediately be Memo Posted to your account and processed during nightly processing. These funds will be immediately available to clear any debit items that may be presented against the account during overnight processing and will be reflected in your account balance and history on the next business day. Express transfers cannot be canceled.

Current Day and Future Dated Transfers:

For one-time transfers that you schedule with either the current date or a future date, the transfer will be processed the evening of the scheduled transfer date during nightly processing. Current day transfer requests will not be memo posted and will not be immediately available. These funds will be available to clear any debit items that may be presented against the account during that business day's overnight processing. If the scheduled transfer date is not a business day, the transaction will be processed on the first business day following the scheduled transfer date.

Recurring Transfers:

Recurring transfers that you initiate through the online service are processed the evening of each scheduled transfer date during nightly processing, and will be reflected in your account balance and history on the following business day. If the scheduled transfer date is not a business day, the transaction will be processed on the first business day following the scheduled transfer date.

Online Banking Transaction Limitations

You may complete an unlimited number of transfers between checking accounts. However, due to regulations that require us to limit pre-authorized transfers on savings accounts, the following limitations apply:

Money Market and Savings Accounts: You may not make more than six (6) withdrawals or transfers per month to another account or to a third party by means of a pre-authorized or automatic transfer, telephone order, computer transfer, or by check, draft, debit card or similar order to a third party.

Exceeding the above transaction limits will result in a per excess transaction fee being assessed on your account based on the fee schedule in place at that time. Exceeding the limits three times in a consecutive 12-month period will result in your account being converted to a non-interest bearing checking account.

Pre-authorized transfers include all automated transfers such as overdraft protection transfers, ACH debits, and transfers initiated by a depositor by telephone, facsimile, or computer

Accounts that require more than one signature for withdrawal cannot be set up for online banking.

Canceling or Changing a Scheduled Transfer

You may cancel or change a scheduled transfer through the Services. Transfers must be changed or canceled prior to 7:00 p.m. EST on the business day the transaction is scheduled to be initiated in order to guarantee the payment is canceled in time. There is no charge for payments that you cancel online.

Express Transfers cannot be canceled.

Online Stop Payments

Stop payments may be placed on outstanding checks or single entry Automated Clearing House ("ACH") transactions that have not cleared your account. Your account will be charged a fee for each stop payment order based on the fee schedule in place at that time.

Stop payment orders on a check will remain in effect for six (6) months from the date they are placed. After six months, the stop payment order will expire and must be renewed in order to continue in effect. The Bank may pay any item that is presented following the lapse of any stop payment order, and is not obligated to notify you when the stop payment order expires.

Stop payment orders on a Single Entry ACH item is in effect for one time only. The Bank may pay an ACH item that is presented after the first stop payment has been exercised or if the amount of the item is different from the amount of the stop payment order that was placed.

Stop Payment on Recurring ACH or Recurring Debit Card Transactions cannot be placed online. If your intent is to stop all future entries from a specific company please contact a Customer Service Representative at 1-800-498-0013.

Procedures for placing a stop payment on a bill pay check can be found under the Bill Pay Service section of this agreement.

BILL PAY SERVICE

Our bill pay service permits you to direct payments from your designated bill pay account to third parties. Your designated bill pay account must be a checking account. Money market accounts and savings accounts are not eligible accounts.

Bill Pay Banking Limitations

Through the bill pay service, you can pay bills from your account to businesses or individuals. All payments must be payable in U.S. dollars to a payee with an address in the United States. The Bank reserves the right to restrict the types of payees to whom payments may be made. The Bank discourages you from using the bill pay service to make payments for alimony, child support, or other court-ordered payments, or for taxes or other governmental fees. Payments to these payees will be your sole responsibility if delayed or improperly processed or credited.

Payments can only be initiated on business days. If the date you schedule a payment to be initiated falls on a non-business day (Saturday, Sunday, or federal banking holiday), the payment will be initiated on the next business day. The Bank's bill pay service provider will then make the payment either by transferring funds electronically or by mailing a check to the payee.

You may choose to schedule payments to recur in the same amount at regular weekly, monthly, or bi-monthly intervals (a "fixed payment"). If a fixed payment is chosen, the payment will automatically process on the schedule you established. If the payment is not a fixed payment, it will be a "variable payment". Variable payments are not made until you enter the current payment amount.

Payment Schedules

Bill pay has one (1) processing deadline at 3:00 p.m. EST every business day. The time recorded by the Bank's online banking service will serve as the official transaction time. When scheduling a payment through the bill pay service, the transaction date should be at least 7 business days prior to the date your payment is due. The due date is the date shown on your invoice or provided in your agreement with the payee, not taking into account any applicable grace period. Once a payment has been made for the first time, the method of payment (electronic or check) will be indicated by the system. This will allow you to schedule your payments to more closely match the due dates. Generally, electronic payments are received by the payee within 3 business days and checks may take up to 7 days to be received by the payee. If you do not allow sufficient time for your payment to be received, you will be fully responsible for all late fees, finance charges, or other action taken by the payee. If you schedule your payment and follow all instructions provided, but the payment is not received by the payee in a timely manner, we will work with the payee on your behalf to attempt to have any late fees or charges reversed.

Canceling or Changing a Scheduled Bill Payment

You may cancel or change a scheduled bill payment through the online bill pay service. Payments must be changed or canceled online prior to 3:00 p.m. EST on the business day the transaction is scheduled to be initiated in order to guarantee the payment is canceled in time. There is no charge for payments that you cancel online.

Bill Pay Stop Payment Procedures

To place a stop payment on a bill pay check that has been processed, you will need to determine if the check number that was issued on your Bill Pay confirmation has cleared your account. If the item has not cleared you can place a stop payment order using the online banking, in person at any branch location, or you may call (800) 498-0013. Your account will be charged a fee for each stop payment order based on the fee schedule in place at that time.

Consumer's Liability for Unauthorized Transfers

***THIS SECTION APPLIES TO CONSUMER ACCOUNTS ONLY***

If you think your password has been lost or stolen, immediately change your password and call the Bank at (800) 498-0013. Phoning the Bank is the best way to minimize your losses. If your password has been lost or stolen, and you notify us within two (2) business days after you learn of the loss or theft, you can lose no more than $50 if someone uses your password without your permission. If you do NOT tell us within two (2) business days after you learn of the loss or theft of your password, and we could have stopped someone from using your password without your permission if you had told us, you could lose as much as $500.

If your statement shows transfers, withdrawals, or purchases that you did not make or authorize, notify the Bank immediately. If you do not notify us within 60 days after the first statement in which the unauthorized transactions appear is sent to you, you may not recover any money lost after the 60 days if we can prove that we could have stopped someone from taking the money if you had notified us in time. If extenuating circumstances (such as a long trip or hospital stay) delayed you from contacting the Bank, these time periods will be extended.

Errors or Questions About Your Electronic Transfers

***THIS SECTION APPLIES TO CONSUMER ACCOUNTS ONLY***

Telephone or write us at the phone number or address shown below, as soon as you can, if you think an error has occurred on your account. We must hear from you no later than 60 days after we sent you the FIRST statement on which the error or problem appeared.

First Federal of Northern Michigan

Attn: Deposit Operations

100 S. Second Avenue

Alpena, MI 49707

(989) 356-9041

(800) 498-0013

Notification should include the following:

Your name and account number;

A description of the error or the transfer you are unsure about, and a clear explanation as to why you believe it is an error, or why you need more information; and

The dollar amount of the suspected error and date on which it occurred.

If you notify us verbally, we will require you to send us your complaint or question in writing within 10 business days after we hear from you.

We will determine whether an error occurred within 10 business days after we hear from you (20 business days for new accounts*) and will correct any error promptly. If we need more time, however, we may take up to 45 days (90 days for point-of-sale transactions, foreign transactions, and transactions on new accounts*) to investigate your complaint or question. If we decide to do this, we will credit your account within 10 business days (20 business days for new accounts*) for the amount you think is in error, so that you will have use of the money during the time it takes us to complete our investigation. If we ask you to put your complaint or question in writing and we do not receive it within 10 business days, we may not credit your account.

We will tell you the results of our investigation within three (3) business days after completing it. If we decide that there was no error, we will send you a written explanation. You may ask for copies of the documents that we used in our investigation.

*An account is considered new if the electronic transfer occurs within the first 30 days after the account is opened.

Our Liability for Failure to Make a Transfer

The Bank is only responsible for exercising ordinary care in processing and sending payments upon your authorization in accordance with this Agreement. If we do not properly complete a bill payment or a transfer to or from your account on time, or in the correct amount according to our agreement with you, we will be liable for your losses or damages resulting directly from such failure in accordance with the law. However, there are some exceptions. For example, we will not be liable in the following instances:

1. If, through no fault of ours, you do not have enough money available (collected funds) in your account to make the transfer.

2. If circumstances beyond our control (such as fire, flood, power outage, equipment or technical failure, breakdown, or delays in mail delivery) prevent the transfer or delivery of a check, despite reasonable precautions that we have taken.

3. If there is a hold on your account, or if access to your account is blocked, in accordance with banking policy.

4. If your funds are subject to legal process or other encumbrance restricting the transfer.

5. If you believe someone has accessed your accounts without your permission, and you fail to notify us immediately.

6. If you have not properly followed the scheduling instructions included in this Agreement on how to make a transfer.

7. If we have received incomplete or inaccurate information from you or a third party involving the account or transfer.

8. If we have a reasonable basis for believing that unauthorized use of your password or account has occurred, or may be occurring, or if you default under this Agreement, the Deposit Agreement, or any other agreement with us, or if we, or you, terminate your Services.

There may be other exceptions stated in this Agreement and in other agreements with you. Please note that the law limits our liability, and we will only be liable for certain kinds of losses and damages. In no event shall the Bank be liable for damages in excess of your actual loss due to our failure to complete a transfer, and we will not be liable for any incidental or consequential damages.

Inactivity and Termination

The Bank may terminate your online banking privileges (including the bill pay service) without notice to you if you do not comply with this Agreement or other agreements governing your accounts. Your Services may also be terminated without notice if your accounts are not maintained in good standing, or if you do not pay any applicable fees required by this and other agreements.

If you do not sign onto the Bank's online banking service to access your accounts, or do not schedule a payment through the Bank's bill pay service for a consecutive 365 day period, we will terminate your Service(s) without notification.

If you wish to cancel your Services, you must notify the Bank and provide your name, address, the service you are discontinuing (online banking, bill pay, or both), and the effective date to stop the service. When bill pay is terminated, any bill payments made through online banking will also be terminated. You may notify us by one of the following methods:

Send a message through the online banking site

Call your local branch or (800) 498-0013 during normal business hours

Write a letter and either send it to the following address or deliver it to a bank employee at any First Federal of Northern Michigan location:

First Federal of Northern Michigan

Attn: Deposit Operations Department

100 S. Second Avenue

Alpena, MI 49707

Headings

Headings are used for referenced purposes only and shall not be deemed a part of this Agreement.

Governing Law

This Agreement is governed by the laws of Michigan and by applicable federal law.