Electronic Funds Transfer Disclosure

For purposes of this disclosure the terms "we", "us" and "our" refer to the Bank named above. The terms "you" and "your" refer to the recipient of this disclosure.

The Electronic Fund Transfer Act and Regulation E require Banks to provide certain information to customers regarding electronic fund transfers (EFTs). This disclosure applies to any EFT service you receive from us related to an account established primarily for personal, family or household purposes. Examples of EFT services include direct deposits to your account and automatic regular payments made from your account to a third party. This disclosure also applies to the use of your ATM Card or Debit Card at our automated teller machines (ATMs) and any networks described below.

This disclosure contains important information about your use of electronic fund transfer (EFT) services provided by this Bank in relation to accounts established primarily for personal, family or household purposes. Please read this document thoroughly and retain it for future reference.

ELECTRONIC FUND TRANSFER SERVICES PROVIDED

SERVICES PROVIDED THROUGH USE OF ATM CARD OR DEBIT CARD

If you have received an electronic fund transfer card ("ATM Card" or "Debit Card") from us you may use it for the type(s) of services noted below, and the following provisions are applicable:

USING YOUR CARD AND PIN. In order to assist us in maintaining the security of your account and the terminals, the ATM Card or Debit Card remains our property and may be revoked or canceled at any time without giving you prior notice. You agree not to use your ATM Card or Debit Card for a transaction that would cause your account balance to go below zero, or to access an account that is no longer available or lacks sufficient funds to complete the transaction. You agree not to use your ATM Card or Debit Card for a transaction that would exceed your account balance plus the available credit on any credit line attached to your account. We will not be required to complete any such transaction, but if we do, we may, at our sole discretion, charge or credit the transaction to another account, and you do agree to pay us the amount of the improper withdrawal or transfer upon request.

Your ATM Card may only be used with your PIN. Certain transactions involving your Debit Card require use of your PIN. Your PIN is used to identify you as an authorized user. Because the PIN is used for identification purposes, you agree to notify the Bank immediately if your ATM Card or Debit Card is lost or if the secrecy of your PIN is compromised. You also agree not to reveal your PIN to any person not authorized by you to use your ATM Card or Debit Card or to write your PIN on your ATM Card or Debit Card or on any other item kept with your ATM Card or Debit Card. We have the right to refuse a transaction on your account when your ATM Card or Debit Card has been reported lost or stolen or when we reasonably believe there is unusual activity on your account. The security of your account depends upon your maintaining possession of your ATM Card or Debit Card and the secrecy of your PIN. You may change your PIN if you feel that the secrecy of your PIN has been compromised. In order to change your PIN we must issue you a new ATM Card or Debit Card.

ATM CARD SERVICES

The following services are available through use of your ATM Card and Debit Card.

You may withdraw cash from your checking account(s), savings account(s), money market account(s), and NOW account(s).

You may make deposits into your checking account(s), savings account(s), money market account(s), and NOW account(s).

Copyright 1995-2001, Compliance Systems Inc. Mon Dec 03 08:34:58 2001D

You may transfer funds between your checking and savings accounts, checking and money market accounts, checking and NOW accounts, savings and money market accounts, savings and NOW accounts, and NOW accounts and money market accounts.

You may make balance inquiries on your checking account(s), savings account(s), money market account(s), and NOW account(s).

NETWORK. Your ability to perform the transactions or access the accounts set forth above depends on the location and type of ATM you are using and the network through which the transaction is being performed. A specific ATM or network may not perform or permit all of the above transactions. For example, you may not be able to make deposits or transfer funds at ATMs located out of state.

Besides being able to use your ATM Card or Debit Card at our ATM Card terminals, you may access your accounts through the following networks: Plus and Star

ATM FEES. When you use an ATM not owned by us, you may be charged a fee by the ATM operator or any network used, and you may be charged a fee for a balance inquiry even if you do not complete a fund transfer.

POINT OF SALE TRANSACTIONS

You may use your ATM Card or Debit Card to purchase goods and services from merchants that have arranged to accept your ATM Card or Debit Card as a means of payment (these merchants are referred to as "Participating Merchants"). Some Participating Merchants may permit you to receive cash back as part of your purchase. Purchases made with your ATM Card or Debit Card, including any purchase where you receive cash, are referred to as "Point of Sale" transactions and will cause your "designated account" to be debited for the amount of the purchase. The designated account for ATM Card transactions is your checking account. The designated account for Debit Card transactions is your checking account.

In addition, your Debit Card may be used at any merchant displaying the Visa tm |Ogo for the purchase of goods and services. Your card may also be used to obtain cash from your designated account at participating financial institutions.

Each time you use your ATM Card or Debit Card, the amount of the transaction will be debited from your designated account. We have the right to return any check or other item drawn against your account to ensure there are funds available to pay for the ATM Card or Debit Card transactions. We may, but do not have to, allow transactions which exceed your available account balance or available overdraft protection. If we do, you agree to pay the overdraft. You also agree to pay overdraft charges in effect from time to time for each transaction which causes your available account balance or available overdraft protection to be exceeded.

We also process “e-checks”.

SERVICES PROVIDED THROUGH USE OF TELEBANK

You may perform the following functions through use of TeleBank.

You may initiate transfers of funds between your checking and savings accounts, checking and money market accounts, checking and NOW accounts, savings and money market accounts, savings and NOW accounts, and NOW accounts and money market accounts.

You may make balance inquiries on your checking account(s), savings account(s), money market account(s), and NOW account(s).

PREAUTHORIZED TRANSFER SERVICES

You may arrange for the preauthorized automatic deposit of funds to your checking account(s), savings account(s), money market account(s), and NOW account(s).

You may arrange for the preauthorized automatic payment of bills from your checking account(s), savings account(s), money market account(s), and NOW account(s).

Copyright 1995-2001, Compliance Systems Inc. Mon Dec 03 08:34:58 2001D

SERVICES PROVIDED THROUGH USE OF ONLINE BANKING

This Bank offers its customers an Internet Banking (Home Banking) service. This service permits you to perform the following transactions using your home computer:

Check your account balances and account history

Transfer funds between Community Bankshares accounts

Know which checks have cleared

View transactions by date, type, and description

Download into Quicken, Microsoft Money, and Excel programs.

This Bank also offers its customers a Bill Payment service for a nominal fee.

Pay your bills, including credit cards, utilities and rent ($4.95 per month and $0.35 per transaction)

You can create a fixed payment plan for your mortgage, car payment, etc.

Your computer must have internet access to use these systems.

LIMITATIONS ON TRANSACTIONS

TRANSACTION LIMITATIONS -ATM CARD

CASH WITHDRAWAL LIMITATIONS - You may withdraw up to $300.00 through use of ATMs in any one day. You may make up to 5 withdrawals of cash through use of ATMs in any one day.

TRANSACTION LIMITATIONS - DEBIT CARD

CASH WITHDRAWAL LIMITATIONS - You may withdraw up to $300.00 through use of ATMs in any one day. You may make up to 5 withdrawals of cash through use of ATMs in any one day.

POINT OF SALE LIMITATIONS - You may buy up to $500.00 worth of goods or services each day through use of our Point of Sale service. You can use our point of sale service for 10 transactions each day.

OTHER LIMITATIONS

The terms of your account(s) may limit the number of withdrawals you may make each month. Restrictions disclosed at the time you opened your account(s), or sent to you subsequently will also apply to your electronic withdrawals and electronic payments unless specified otherwise.

We reserve the right to impose limitations for security purposes at any time.

LIMITS ON TRANSFERS FROM CERTAIN ACCOUNTS. Federal regulation limits the number of telephonic transfers and preauthorized electronic transfers to third parties (including Point of Sale transactions) from money market and savings type accounts. You are limited to six such transfers from each money market and/or savings type account(s) you have each statement period for purposes of making a payment to a third party or by use of a telephone.

NOTICE OF RIGHTS AND RESPONSIBILITIES

The use of any electronic fund transfer services described in this document creates certain rights and responsibilities regarding these services as described below.

RIGHT TO RECEIVE DOCUMENTATION OF YOUR TRANSFERS

TRANSACTION RECEIPTS. Upon completing a transaction at an ATM you will receive a printed receipt documenting the transaction (unless you have chosen not to get a paper receipt). These receipts (or the transaction number given in place of the paper receipt) should be retained to verify that a transaction was performed. You will receive a receipt at the time you perform any transaction using your ATM Card or Debit Card at a Participating Merchant.

PERIODIC STATEMENTS. If your account is subject to receiving a monthly Statement, all EFT transactions will be reported on it. If your account is subject to receiving a statement less frequently than monthly, then you will

Copyright 1995-2001, Compliance Systems Inc. Mon Dec 03 08:34:58 2001D

continue to receive your statement on that cycle, unless there are EFT transactions, in which case you will receive a monthly statement.

PREAUTHORIZED DEPOSITS. If you have arranged to have direct deposits made to your account at least once every 60 days from the same person or company:

• The person or company making the deposit will tell you every time they send us the money
• You can call us at 1-877-539-4838 to find out whether or not the deposit has been made

RIGHTS REGARDING PREAUTHORIZED TRANSFERS

RIGHT TO STOP PAYMENT AND PROCEDURES AND NOTICE OF TRANSFERS WHICH VARY IN AMOUNT:

STOP PAYMENT RIGHTS AND PROCEDURES. If you have instructed us in advance to make regular payments out of your account, you can stop any of these payments. To stop a payment, call us at:

Or write to:

Or call the telephone number or write to the address appearing on your periodic statement, in time for us to receive your request three (3) business days or more before the payment is scheduled to be made. If you call, we will require you to put your request in writing and deliver it to us within fourteen (14) days after you call.

NOTICE OF VARYING AMOUNTS. If these regular payments may vary in amount, the person you are going to pay will tell you, ten (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 three (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.

YOUR RESPONSIBILITY TO NOTIFY US OF LOSS OR THEFT

If you believe your ATM Card or Debit Card has been lost or stolen or that someone has transferred or may transfer money from your account without your permission, call us at:

Or write to:

CONSUMER LIABILITY

You will tell us at once if you believe your ATM Card or Debit Card has been lost or stolen. Telephoning is the best way of keeping your possible losses down.

FOR CARDS. If your ATM Card or Debit Card is lost or stolen and subsequently used by an unauthorized person, you will only be liable for the lesser of $50.00 or the amount of money, goods or services obtained by the unauthorized use prior to your giving notice to us of the theft or loss. If the unauthorized use occurs through no fault of your own, no liability will be imposed on you.

FOR NON-CARD INITIATED TRANSFERS. If you fail to telephone us or write us within sixty (60) days of receiving your periodic statement or other receipt of an EFT which appears to be unauthorized, you will be liable for the lesser of $50.00 or the amount of the unauthorized EFT that appears on the periodic statement or receipt or that occurs during the sixty (60) day period. If you do not tell us within sixty (60) days after the periodic statement or receipt was mailed to you, you may not receive back any of the money you lost after the sixty (60) days, and therefore, you could lose all the money in your account (plus your maximum overdraft line of credit, if applicable), if we can prove that we could have stopped someone from taking the money had you given us notice in time.

Copyright 1995-2001, Compliance Systems Inc. Mon Dec 03 08:34:58 2001D

If a good reason (such as a long trip or hospital stay) keeps you from giving the notice, we will extend the time periods.

CONSUMER LIABILITY FOR UNAUTHORIZED TRANSACTIONS INVOLVING DEBIT CARD

The limitations on your liability for unauthorized transactions described above generally apply to all electronic fund transfers. However, different limitations apply to certain transactions involving your Debit Card with the Visa tm logo. These limits apply to unauthorized transactions processed on the Visa t'm Network.

If you notify us about an unauthorized transaction involving your Debit Card, and the unauthorized transaction took place on the Visa ™ Network, zero liability will be imposed on you for the unauthorized transaction. We may increase the limit of your liability for such unauthorized transactions if we reasonably determine, based on substantial evidence, that you were grossly negligent or fraudulent in the handling of your account or your Debit Card. The zero liability provisions do not apply to PIN-based transactions not processed by the Visa tm Network, including ATM transactions.

Your liability for unauthorized transactions with your Debit Card that involve PIN-based transactions not processed by the Visa ™ Network, including ATM transactions, are described under "Consumer Liability" above.

IN CASE OF ERRORS OR QUESTIONS ABOUT YOUR TRANSACTIONS

In case of errors or questions about your electronic fund transfers, call us at:

between 8:00 AM and 5:00 PM or use the current information on your most recent account statement.

Or write to:

Notification should be made as soon as possible if you think your statement or receipt is wrong or if you need more information about a transaction listed on the statement or receipt. You must contact the Bank no later than 60 days after it sent you the first statement on which the problem or error appears. You must be prepared to provide the following information:

• Your name and account number.
• A description of the error or transaction you are unsure about along with an explanation as to why you believe it is an error or why you need more information.
• The dollar amount of the suspected error.

If you provide oral notice, you will be required to send in your complaint or question in writing within ten (10) business days.

We will determine whether an error occurred within ten (10) business days (twenty (20) business days for new accounts) after we hear from you and will correct any error promptly. If we need more time, however, we may take up to forty-five (45) days (ninety (90) days for new accounts and foreign initiated or point of sale transfers) to investigate your complaint or question. If we decide to do this, we will credit your account within ten (10) business days (twenty business (20) days for new accounts) for the amount which you think is in error, so that you will have the use of the money during the time it takes to complete our investigation. If we ask you to put your complaint or question in writing and we do not receive it within ten (10) business days, we may not credit your account. The extended time periods for new accounts apply to all electronic fund transfers that occur within the first thirty (30) calendar days after the first deposit to the account is made, including those for foreign initiated or point of sale transactions. Visa's tm cardholder protection policy requires that we provide provisional credit for losses from unauthorized Visa tm Check Card use within five (5) business days of notification of the loss.

We will tell you the results within three (3) 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.

Copyright 1995-2001, Compliance Systems Inc. Mon Dec 03 08:34:58 2001D

LIABILITY FOR FAILURE TO COMPLETE TRANSACTION

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 as provided by law. However, there are some exceptions. We will NOT be liable, for instance:

• If through no fault of ours, you do not have enough money in your account to make the transfer.
• If the transfer would result in your exceeding the credit limit on your line of credit, if you have one.
• If the electronic terminal was not working properly and you knew about the breakdown before you started the transfer.
• If circumstances beyond our control (such as fire or flood, computer or machine breakdown, or failure or interruption of communications facilities) prevent the transfer, despite reasonable precautions we have taken.
• If we have terminated our Agreement with you.
• When your ATM Card or Debit Card has been reported lost or stolen or we have reason to believe that something is wrong with a transaction.
• If we receive inaccurate or incomplete information needed to complete a transaction.
• In the case of preauthorized transfers, we will not be liable where there is a breakdown of the system which would normally handle the transfer.
• If the funds in the account are subject to legal action preventing a transfer to or from your account.
• If the electronic terminal does not have enough cash to complete the transaction. There may be other exceptions provided by applicable law.

CHARGES FOR TRANSFERS OR THE RIGHT TO MAKE TRANSFERS

We reserve the right to impose a fee and to change fees upon notice to you.

Bill Payment is $4.95 per month and $0.35 per transaction. This fee will be automatically deducted from your Bill Payment account on a monthly basis.

DISCLOSURE OF ACCOUNT INFORMATION

You agree that merchant authorization messages transmitted in connection with point of sale transactions are permissible disclosures of account information, and you further agree to release the Bank and hold it harmless from any liability arising out of the transmission of these messages.

We will disclose information to third parties about your account or electronic fund transfers made to your account:

1. Where necessary to complete a transfer or to investigate and resolve errors involving the transfer(s); 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. With your consent.

DEFINITION OF BUSINESS DAY

Business days are Monday through Friday excluding holidays.

ADDITIONAL PROVISIONS

Your account is also governed by the terms and conditions of other applicable agreements between you and the Bank.

You agree not to reveal your PIN to any person not authorized by you to access your account.

Copyright 1995-2001, Compliance Systems Inc. Mon Dec 03 08:34:58 2001D