ELECTRONIC FUND TRANSFER DISCLOSURE

Indicated below are types of Electronic Fund Transfers we are capable of handling, some of which may not apply to your account. Please read this disclosure carefully because it tells you your rights and obligations for the transactions listed. You should keep this notice for future reference. Preauthorized credits. You may make arrangements for certain direct deposits to be accepted into your checking or savings account(s). Preauthorized payments. You may make arrangements to pay certain recurring bills from your checking account(s). SHAZAM, VISA and Cirrus Networks – You may access your account by ATM using your ShazamCheck Card and personal identification number to get cash withdrawals from your checking account - the dollar limit will be disclosed in writing upon card authorization. SHAZAMCheck point-of-sale transactions – You may access you checking account to purchase goods (in person or by phone), get cash from a merchant, if the merchant permits, or from a participating financial institution, and do anything that you can do with a credit card (that a participating merchant will accept with a credit card). – the dollar limit will be disclosed in writing at card authorization.

ELECTRONIC CHECK CONVERSION
You may access your checking account to purchase goods or get cash from a merchant if the merchant allows and you allow the merchant to convert your check information to an electronic format.

TERMINATION
* You may terminate the electronic fund transfer agreement by written notice to us.

* We may terminate the electronic fund transfer agreement by written notice to you

FEES
* We will charge $5.00 to replace a lost debit card

* We do not charge for direct deposits to any type of account

* We do not charge for preauthorized payments from any type of account.

* Except as indicated elsewhere, we do not charge for electronic fund transfers.

Notice regarding ATM fees by others. If you use an automated teller machine that is not operated by us, you may be charged a fee by the operator of the machine and/or by an automated transfer network.

DOCUMENTATION
Terminal transfers. You can get a receipt at the time you make any transfer to or from your account using one of our automated teller machines or point-of-sale terminals.

Preauthorized credits. If you have arranged to have direct deposits made to your account at least once every 60 days from the same person or company, you can call us at 320-356-7334 to find out whether or not the deposit has been made.

Periodic statements. You will get a monthly account statement from us for your checking accounts. For passbook accounts, you will get your account statement quarterly.

PREAUTHORIZED PAYMENTS
Right to stop payment and procedures for doing so. If you have told us in advance to make regular payments out of your account, you can stop any of these payments. Here is how:

Call or write us at the telephone number or address listed in this disclosure in time for us to receive your request 3 business days or more before the payment is scheduled to be made. If you call, we may also require you to put your request in writing and get it to us within 14 days after you call.

We will charge for each stop payment order you give. See Truth in Savings Disclosure.

Notice of varying amounts. If these regular payments may vary in amount, the person you are going to pay will tell you, 10 days before each payment, when it will be made and how much it will be. (You may choose instead to get this notice only when the payment would differ by more than a certain amount from the previous payment, or when the amount would fall outside certain limits that you set.)

Liability for failure to stop payment of preauthorized transfer. If you order us to stop one of these payments 3 business days or more before the transfer is scheduled, and we do not do so, we will be liable for your losses or damages.

FINANCIAL INSTITUTION’S LIABILITY

Liability for failure to make transfers. If we do not complete 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. However, there are some exceptions. We will not be liable, for instance:

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

(2) If you have an overdraft line and the transfer would go over the credit limit.

(3) If the automated teller machine where you are making the transfer does not have enough cash.

(4) If the terminal or system was not working properly and you knew about the breakdown when you started the transfer.

(5) If circumstances beyond our control (such as fire or flood) prevent the transfer, despite reasonable precautions that we have take.

(6) There may be other exceptions stated in our agreement with you.

CONFIDENTIALITY

We will disclose information to third parties about your account or the transfers that you make:

(1) when it is necessary for completing transfers; or

(2) in order to verify the existence and condition of your account for a third party, such as a credit bureau or merchant; or

(3) in order to comply with government agency or court orders; or

(4) if you give us written permission.

UNAUTHORIZED TRANSFERS

(a) Consumer liability. (1) Generally. Tell us at once if you believe your card and /or code has been lost or stolen. Telephoning is the best way of keeping your possible losses down. You could loose all of the money in your account (plus your maximum overdraft line of credit). We will be liable for all unauthorized transfers unless the unauthorized transfer was due to the loss or theft of your card and/or code. If due to the loss or theft of your card and /or code, and you notify us within 60 days of when the unauthorized transfer appears on the statement you can lose no more than $50 if someone used your card and/or code without permission.

If you do NOT notify us within 60 days after the unauthorized transfer appears on your statement, and we prove that we could have stopped someone from using your card and/or code without your permission if you had told us within 2 days of when you discover the loss or theft of your card and/or code, you could lose as much as $500 for unauthorized transfers that appear on the statement.

Also, if your statement shows transfers that you did not make, tell us at once. If you do not tell us within 60 days after the statement was mailed to you, you may not get back any money you lost after the 60 days if we prove that we could have stopped someone from taking the money if you had told us in time.

If a good reason (such as a long trip or a hospital stay) kept you from telling us, we will extend the time periods.

(2) Effective 11-01-97, Additional Limits on Liability for SHAZAMCheck Card, when used for point-of-sale transactions. Unless you have been grossly negligent or have engaged in fraud, you will not be liable for any unauthorized transactions using your lost or stolen SHAZAMCheck Card, when used for point-of-sale transactions, if you report the loss or theft of your card within 2 business days, your liability is the lesser of $50 or the amount of money, property, labor, or services obtained by the unauthorized use before notifications to us.

(b) Contact in event of unauthorized transfer. If you believe your card and/or code has been lost or stolen or that someone has transferred or may transfer money from your account without your permission, call or write us at the telephone number or address listed in this disclosure.

RIGHT TO BRING CIVIL ACTION

You may bring civil action against any person violating any provision of Minnesota Statutes 47.69 (governing consumer privacy and unauthorized withdrawals).

If you prevail in such an action, you may recover the greater of your actual damages or $500. You may also be entitled to recover punitive damages, your court costs and reasonable attorney’s fees.

TIME NEEDED TO COMPLETE TERMINAL TRANSACTIONS

Withdrawal made at a terminal will normally be completed and charged to your account the next business day.

POINT-OF-SALE TRANSACTIONS

Payment for goods or services made in this manner shall not affect any of the rights, protections, or liabilities in existing law concerning a cash or credit sale made by means other than through the use of a terminal. You cannot reverse a point-of-sale transaction.

ERROR RESOLUTION NOTICE

In Case of Errors or Questions About Your Electronic Transfers, Call or Write us at the telephone number or address listed in this disclosure, as soon as you can, if you think your statement or receipt is wrong or if you need more information about a transfer listed on the statement or receipt. We must hear from you no later than 60 days after we sent the FIRST statement on which the problem or error appeared.

(1) Tell us your name and account number (if any).

(2) Describe the error or the transfer you are unsure about, and explain as clearly as you can why you believe it is an error or why you need more information.

(3) Tell us the dollar amount of the suspected error.

If you tell us orally, we may require that you send us your complaint or question in writing within 10 business days.

We will determine whether an error occurred within 10 business days (5 business days if the transfer involved a point-of-sale transaction and 20 business days if the transfer involved a new account) after we hear from you we will correct any error promptly. If we need more time, however, we may take up to 45 days (90 days if the transfer involved a new account, a point-of-sale transaction, or a foreign-initiated transfer) to investigate your compliant or question. If we decide to do this, we will credit you account within 10 business days (5 business days if the transfer involved a point-of-sale transaction and 20 business days if the transfer involved a new account) for the amount you think is in error, so that you will have the 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. An account is considered a new account for 30 days after the first deposit is made, if you are a new customer.

We will tell you the results within three business days after completing our investigation. 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.

AVON STATE BANK PO Box 8 Avon, MN 56310-0008 Phone: (320) 356-7334

Business Days: Monday through Friday Excluding Federal Holidays

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