Loan Category Configuration: G/L, Payment Matrix and Other Settings

Description

General Ledger Interface

These fields control how loans with this category will interface with the G/L.

Enter the G/L asset account number where principal on this type of loan should be posted.

Enter the G/L income account number where earned interest for this type of loan should be posted.

Enter the G/L asset account number where accrued interest for this type of loan should be posted.

This field should be used ONLY by credit unions which utilize the Rule of 78 for calculating insurance rebate amounts. Contact a CU*BASE representative for additional information.

(Used with Process type “P” and “S” only.) Enter the G/L asset account number where accrued interest from student loans for the current calendar quarter should be posted.

(Used with Process type “P” and “S” only.) Enter the G/L asset account number where accrued interest from student loans for the previous calendar quarter should be posted (after student loan processing).

Enter the loan category to use when writing off the loan.

• As of November 16, 2009, loan categories other than 99 may be configured to use when writing off a loan. For example, it may be helpful to create a separate write off loan category for credit card loans. Changes to the category affect only loans created after the change, however; is not retroactive.

Payment Matrix Priorities

The payment matrix indicates how funds should be distributed when a loan payment is made, and is used primarily when the payment is under or over the normal amount. For example, if a member's payment is short, the payment matrix can direct the system to first satisfy any delinquency fines, then the interest amount, then use any leftover funds toward principal.

• NOTE: There are special rules that should be followed when setting up the payment matrix for interest-only loan types. Refer to the booklet, CU*BASE Mortgage Products: Interest Payment Only Loans for details.

Enter a sequential number (0=no funds, 1=first, 2=second, etc.) to indicate the order in which funds should be disbursed between the following:

Delinquency fines which are due.

Interest due on the loan.

The principal on the loan.

The escrow account associated with this loan (for loan process type “L” and “M” only).

• NOTE: In order for the system to handle escrow payments automatically, an escrow account must be linked to a loan account. A loan category which may use escrow accounts (such as Mortgages) must have its payment matrix priorities set up to include escrow accounts. If the Escrow priority is left blank or is “0,” the system ignores the escrow account and any payments to the escrow must be made manually.

• Refer to the Escrow Processing booklet for details.

Miscellaneous funds to be paid to a G/L account, such as sales tax for lease agreements. (Also see Miscellaneous GL account, Miscellaneous GL transaction description and Misc GL amount below.)

This field indicates what should be done with extra funds, when the loan payment is higher than required.

• NOTE: This field requires that the loan category “Next Payment date/delinq control on the previous loan category screen is set to P=Single pmt/period.

PRN Over-payment should be applied to principal.

ESC Over-payment should be applied to the escrow account (if any).

You may also enter an account type suffix, such as 000 for shares, 001 for a checking account, etc.

If you entered a priority other than zero for Misc G/L Processing, use this optional field to indicate a default G/L account number where funds should be transferred.

If you entered a priority other than zero for Misc G/L, enter the transaction description to be used for the funds transferred to the miscellaneous G/L account (such as “SALES TAX PAYMENT”).

If you entered a priority other than zero for Misc G/L, use one of these optional fields to indicate the amount that should be transferred to the G/L account whenever a payment is made:

Amount If the same amount should be transferred regardless of the payment being made (such as for a service fee), enter the exact amount here.

Percent To transfer a percentage of the total payment amount (such as for 6% sales tax on a lease loan payment), enter the percentage here (06000 = 6.000%).

Additional Information

Check this box for home equity loans, mortgages, and other loan types for which a 1098 tax form should be generated at year end. This does NOT apply to student loans (form 1098-E). 

This box MUST be checked prior to December 31 in order for the tax file to be created properly.  If you change the setting of this flag for any reason, please contact a CSR for assistance ensuring that all related loan accounts and tax file records are also adjusted appropriately.

• Credit Cards: For credit cards, if this credit card program allows a link to home equity, place a checkmark here.

Check this flag if you want to add any amount owed over the loan disbursement limit to the monthly payment, when payment changes are calculated. (This flag must be checked if the Apply stepdown flag is checked.) For example, if the disbursement limit is $5,000 but the member’s current balance is $5,030, then when calculating that month’s payment an extra $30 would be added to the interest due amount.

• IMPORTANT: This means the overline amount must be paid in order to advance the due date on the loan.

For online credit cards, when this flag is checked the balance on the card is compared to the credit limit. If the limit has been exceeded, at statement generation that amount is added to the regular payment due to calculate the total payment due.

SEE ALSO: Credit Cards: Configuration Guide

For interest-only loans, this feature is used primarily to handle the addition of insurance premiums. (It is also required if the Apply stepdown feature is activated.) Because the member isn't paying down the principal, the loan balance on these loans usually remains at the original disbursement limit. When an insurance premium is added to the loan account, it can cause the account balance to go above the disbursement limit, making it appear as though the account is overline, and the amount never gets caught up until the note comes due. Activating this feature means that members would be forced to catch up that additional amount on their next payment. Refer to the Interest Payment Only Loans booklet for more details on this feature.

Enter a whole number (no decimal digits) to indicate the maximum amount which can be disbursed with this loan category. Enter “999999999” to allow any amount.

• For credit cards: If disbursements are allowed in audio and online banking (this is done via a transfer), the credit card system will treat them as a cash advance. You may choose a minimum and maximum disbursement amount if desired (use 1 and 999,999,999 to allow any disbursement up to the limit on the account). For credit cards loans, this is also the maximum credit limit allowed for any loan under this category.

(Available only for LOC (Process Type L) loan categories that use the interest-only calc type.) This allows you to configure a line-of-credit category as a step-down loan, which allows you to reduce the disbursement limit each month based on the amortization term. If this is checked, the Add overline to payment flag must also be checked.

Refer to the Interest Payment Only Loans booklet for complete details on this feature.

Interest payment only loans - Scheduled payment calculation

This section is displayed when the Payment calculation type flag for this category was set to “I” for Interest Only.

• NOTE: There are special rules that should be followed when setting up the payment matrix for these loan types. Refer to the Interest Payment Only Loans booklet for details.

This is the day on which a new payment amount is calculated each month (also referred to as the payment calc date). Can be set to any valid day of the month. If “31” is entered, the system will always use the last day of the month, automatically compensating for months with less than 31 days.

• SPECIAL NOTE FOR 360-DAY CALCULATION TYPES: If you are setting up an interest-payment-only loan that uses the 360-day calculation type, be sure to enter the day after you are using as the Day to calculate interest (on the first loan category configuration screen) so that payment amounts are changed after interest is calculated. (Payments for these types of loans change during beginning-of-day processing whereas interest accrues at end-of-day processing.)

NOTE: A maximum of 15 loan categories can share the same payment calc date. You can create additional categories if you wish, but they must use a different payment calc date.

Use this field to set the minimum payment amount that should be used regardless of the interest due on the loan. If the total amount of interest due on the update day is less than this amount, CU*BASE will use this amount as the new payment. A minimum payment is required; this field cannot be set to zero.

This field tells the system when new payments should be calculated next for these loans (month and year). This field is required when setting up a new interest payment only loan category. This will automatically increment forward when the new payments are calculated each month.

CAUTION: This generally should NOT be changed on an existing category. Contact a CSR for assistance.

Check this box if you wish to generate a notice showing the new payment amount each time the new payment calculation is performed. Leave it unchecked if you do not want notices.

• NOTE: If checked, be sure to include notice event PAYCHG in one of your laser notice forms so that the notices can be printed. This is the same notice event that is used for notices for regular LOC payment changes. SEE ALSO: Member Notices: Configuring and Printing CU-Defined Laser Notices

(Available only for loan categories that use the interest-only calc type.) Check this flag to automate the switch from an interest-only loan to a loan where the member pays off both the balance (principal) and interest. Refer to the Interest Payment Only Loans booklet for details on how this feature works.

• BE CAREFUL: If activating this feature on an existing category, all existing loans associated with this category, including previously-created loans, will begin obeying these settings the next time payments are calculated.

If the Switch to principal & interest pmt calc type flag is checked, use this to specify the period during which interest-only payments should be calculated. Once this period has passed (compared to the month the loan was opened), the system will automatically re-amortize the loan and calculate a new payment to include both principal & interest. Refer to the Interest Payment Only Loans booklet for details on how this feature works.

If the Switch to principal & interest pmt calc type flag is checked, use this to specify the loan term that should be used when re-amortizing the loan and calculating the new P&I payment amount that will be used from that point on. Refer to the Interest Payment Only Loans booklet for details on how this feature works.

Escrow Information

This section is displayed if the Process type for this loan was set to either “L” (LOC) or “M” (mortgage).

SEE ALSO:Escrow Processing with CU*BASE

Use this flag to control whether or not tax escrow accounts can be linked to loans of this category.

• NOTE: If checked, be sure to assign a priority to Escrow in the Payment Matrix Priorities fields described above.

• Refer to the Escrow Processing booklet for details.

Student Loans

This section is displayed if the Process type for this loan was set to “S” (student loans in interim) or “P” (student loans in payout) only.

There are two types of student loans: Government and USA. Choose one of the following codes to define the type of funds used to back the student loan:

G Government funds, such as Stafford Loans (formerly Guaranteed Student Loans), Parent Loan Supplement (PLUS), Student Loan Supplement (SLS), etc.

U USA funds, such as Perkins, National Direct Student Loans, and all government-funded loans.

Choose one of the following codes to define the guarantee agency for this student loan:

A Stafford Loans (formerly Guaranteed Student Loans)

B Parent Loan Supplement (PLUS)

C Student Loan Supplement (SLS)

D Consolidation

• A guarantee agency is a loan association who guarantees that the student is attending school and sets the loan repayment date.

Description

Use this to cancel all changes and return to the initial screen.

Use this to save all changes and return to the initial screen.

Use this to view the payment controls for the loan category.  Use this to specify how partial payments and partial escrow payments should be handled.