Configuring NSF and Overdraft Protection (2)

Description

Overdraft Transfers

If you would like the overdraft protection system to transfer funds from share accounts only in certain increments, regardless of the overdraft amount, enter the increment here. Leave the field blank to pull just the amount needed to cover the transaction, plus the fee.

If you wish just to transfer the exact amount of the transaction (plus any fee) from the share account, check this box.

HINT: To maximize your fee income, check this box. Using exact transfers means that the transfer will be enough to cover only the draft(s) being presented today. Any drafts presented on subsequent days would require an additional transfer and fee.

• NOTE: You may want to check this box even if you enter an increment in the “O/D transfer increment (shares)” field above to cover situations where your member does not have the full incremental amount in his or her share account.

Let’s say Mary Member is overdrawn $50.00, and only has $70.00 available to transfer. If you have entered an increment of $100.00 above and did not check this box, no funds would be transferred (since $100.00 is not available). If, however, you leave this box checked (same situation otherwise), $50.00 would be transferred to cover the amount Mary was overdrawn.

Enter the fee amount for an overdraft protection transfer from one or more share-type accounts.

If you would like the overdraft protection system to transfer funds from LOC accounts only in certain increments, regardless of the overdraft amount, enter the increment here. Leave the field blank to pull just the amount needed to cover the transaction, plus the fee.

For example, if you have a special overdraft line-of-credit account your members use for overdraft protection, this could be set to $100 so only transfers in $100 increments are made from the LOC account. If an overdraft of $125 is presented, $200 will be transferred.

If you wish just to transfer the exact amount of the transaction (plus any fee) from the LOC account, check this box.

• HINT: To maximize your fee income, check this box. Using exact transfers means that the transfer will be enough to cover only the draft(s) being presented today. Any drafts presented on subsequent days would require an additional transfer and fee. Use No if you prefer to advance funds from a LOC only in standard increments.

• NOTE: You may want to check this box even if you enter an increment in the “O/D transfer increment (shares)” field above to cover situations where your member does not have the full incremental amount in his or her LOC.

Let’s say Mary Member is overdrawn $50.00, and only has $70.00 available to transfer. If you have entered an increment of $100.00 above and did not check this box, no funds would be transferred (since $100.00 is not available). If, however, you leave this box unchecked (same situation otherwise), $50.00 would be transferred to cover the amount Mary was overdrawn.

For normal overdraft protection disbursements from LOC accounts, 100 (for 100%) must be entered in this field.

This field can also be used to allow a distribution from an LOC account that goes above the disbursement limit on the loan. For example, if you wish to allow a withdrawal to cover an incoming check to take the LOC account over its limit by an additional 10%, enter 110 (for 110%) here.

• HINT: Use the Work Collections feature to check these “overline” accounts.

NOTE: This feature has not been used extensively; therefore, thorough testing is recommended before implementing a percentage other than 100%. Contact a CU*BASE Client Service Representative for assistance.

Enter the fee amount for an overdraft protection transfer from one or more line-of-credit accounts.

If Allow transfer of exact amount is checked for share or LOC transfers, this optional field can be used to designate the transfer of extra funds above the amount needed for the transaction (plus fee), to help cover any other checks written but not yet cleared.

Enter the general ledger account number where the fee income from overdraft transfer fees should be posted.

If you have elected to use the combined overdraft protection feature (set as part of the ODP/NSF activation feature), enter the fee amount that should be charged when funds are pulled from both a share-type and a loan-type account to cover a transaction.

• If ALL funds are pulled from share-type accounts (even if two or more accounts are used), the O/D transfer fee (from shares) fee amount will be used.

• If ALL funds are pulled from loan-type accounts (even if two or more accounts are used), the O/D transfer fee (from LOC) fee amount will be used.

Check this box (Y) if you wish to allow the account from which funds are being transferred to be taken to a negative balance by the overdraft transfer fee.

Leave this box unchecked (N) if a fee should be charged only if there are sufficient funds to cover both the transaction amount and the fee.

For example, say a member writes a check for $125 and does not have sufficient funds in his checking account. His designated overdraft protection account has only $126, enough to cover the check but not enough for the $6.00 O/D transfer fee.

If this flag is set to Yes, the full amount plus the fee will be taken, with the fee amount bringing that account to a negative balance of -$5.00.

If the flag was set to No, the transaction amount would transferred, but the fee would not be charged. (This is NOT recommended.)

NOTE: This setting does alter the order in which items will be posted on a member's account. If set to Yes, items will appear in this order in transaction history:

ODP deposit

Check 1

Check 2, etc.

OFP fee

If set to No, this order will be used:

ODP deposit

OFP fee

Check 1

Check 2, etc.

This optional flag lets you set a tolerance so that your normal overdraft protection fee is not charged when transferring a very small amount (such as $5.00 or $10.00, for example). By default this flag will be set to $0.00, meaning that overdraft transfers will be charged your normal fee, regardless of the amount of the transfer.

• Keep in mind that this refers to the total amount being transferred. If a combined transfer takes a portion of the funds out of one account and the remainder out of another, the fee would still be charged as long as the total amount being transferred is over the tolerance set in the new field.

NSF - Returned Items

This section controls how items are handled that cannot be posted due to non-sufficient funds, that are returned.

This section also applies to debit and credit card transactions that are force posted to your member’s account and bring your member’s accounts into a non-sufficient funds range. Example would be a recurring transaction which may not have included an authorization and/or a transaction that had an authorization either by CU*BASE or by your EFT vendor but when the clearing posted the balance of the account was taken negative.

• NOTE: If you configure a fee, the transaction description the system will use is “NSF FEE.”

Enter the fee amount to be charged when there are insufficient funds to post a withdrawal from this account type.

• Remember that for share drafts, you can work an NSF item and choose to waive this NSF fee for an individual check if appropriate, according to credit union policy. SEE ALSO:Working Share Draft Exceptions

Enter the general ledger account number where the fee income from NSF fees should be posted.

Choose Per item to repeat the fee for every item that is presented as NSF. (If 5 checks are presented NSF, the fee will be charged five times.)

Choose Per day to charge a single fee regardless of the number of items presented that day. (If 5 checks are presented NSF on the same day, the fee is only charged once.)

• WARNING: The “Per day” option was designed in the days when share draft (check) processing was the only system that assessed NSF fees. Additional channels such as debit/ATM cards, ACH, etc., are not set up to track all NSF transactions that hit during the same day. While the setting may still work properly for check processing, it is not warranted to work in the same way for other NSF fees.

Non-Returned Items

This section controls how NSF items that are not returned will be handled. This controls both your Automated Non-Returns policy as well as any items that are force-paid manually through the Share Draft Exceptions system.

Enter the fee amount that should be charged to members when NSF items are not returned, but rather are posted to member accounts, resulting in a negative balance. This fee is always charged once for each item that is posted.

• This same fee is used for Automated Non-Returns as well as share draft items that are force paid by using status code “F” on the Share Draft Exception File screen.

Enter the general ledger account number where the fee income from non-return fees should be posted.

• To allow you to track the fee income from your non-return program, it is strongly recommended that this be a unique G/L account not used for other types of fees.

Enter a description to be used when posting your non-return fee to a member's account. To distinguish this fee from the one you charge when an item is actually returned, we recommend you do NOT use the description “NSF FEE” but rather “NON-RETURN FEE” or something similar. This will make it much easier for staff to determine whether an item was force-paid for the member or not.

When updating this description, it will also update the description in the NSF summary section box of the member’s statement.

• HINT: If you are using the Automated Non-Returns feature as a sort of “courtesy pay” program, this description could include a reference to that program.

Use this field to allow checks/electronic withdrawals to be cleared on a member's account up to a certain amount over the available balance, without incurring your regular non-return fee. This is commonly set to a low amount such as $1.00 or $5.00 so you do not have to work accounts where an item was presented and the available balance was just shy of the amount needed to post.

• For example, say a member has an available balance of $125 in her checking account and a check for $126.13 is presented. If the Non-fee tolerance field is set to $5.00, the check would post with no fee or overdraft protection needed. Any subsequent checks presented that took the account more than $5.00 below the available balance would either be posted with your non-return fee (up to the Negative Balance Limit on that account), or would be returned as NSF.

• HINT: If your credit union is setting up an automated non-returns program, it is generally recommended that this be set to $0 so that your non-return fee is applied consistently for all transactions that result in a negative balance.  

Use this field to set daily (business day) maximums for the amount of ANR fees that a member could potentially pay. The fee cap configurations apply to ANR fees only and include check postings, in-house drafts, ACH, ATM/Debit (online) transactions, and bill pay transactions. Fees waived due to the cap will be logged for analysis in the CU*BASE Fee Income/Waiver/Refunds dashboard and report.

In this section you can elect to charge a different fee by Origin Code, for example, to charge a lower fee for debit card transactions.  If you wish to charge the same fee regardless of origin code, enter the same fee in all field in the Non-Return Fee column.  If you would like to only charge the fee if the transaction is larger than a certain amount, enter that amount in the For Trx Amts Greater Than field.  Then the fee will only be charged if the transaction is greater than or equal to that amount.

This section shows the date on which this configuration was last modified, and the employee ID that made the changes.