Delinquency and Fine Calculation Methods Used by CU*BASE
Loan Delinquency
All CU*BASE systems, including inquiry screens, reports and the like, use the Method D calculation method to determine how delinquent a member's loan is.
There is also a single stand-alone Method B Delinquency Analysis report (Tool #666 Print Method B Delinquency Report) that will calculate and report member delinquency using Method B.
Delinquency Fines
Following are standards and methods used for calculating delinquency fines for CU*BASE loan accounts:
Fine Calculation Standards
Each payment can only be fined once for a delinquent status. To accomplish this, the system uses only one calculation date for fines, based on a payment due date and grace period. Example:
Payment Due Date: January 5
Grace Period: 10 days
Fine Calculation Date: January 15
If the loan is delinquent on the Fine Calculation Date, the fine is added for collection. If the loan is current on the Fine Calculation Date, the fine is waived.
Fine Collection Standards
The collection of a fine will not create an additional delinquent payment. (The collection of a fine will not reduce the payment based upon the calculation for next payment period.)
To accomplish this, the credit union can configure the loan so that, a) the fine is recorded as paid only if the member pays the full regular payment plus the outstanding fine, or b) the actual amount paid is recorded as a partial payment and the due date is moved forward one increment.
Calculation Type Standards
The system will allow fines to be calculated using one of three methods. All methods except the flat fee have minimum and maximum fine amounts.
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If your credit union collects fines last in the payment matrix (allowing members to become current without satisfying fines due), unpaid fine amounts from previous days or periods will still be retained when each new fine amount is calculated.
Method 1a - Interest per day, single amount per period
The delinquency fine is calculated as a percentage of interest due on the Fine Calculation Date only. Example:
Payment Due Date: January 5
Grace Period: 10 days
Minimum Fine: $2.00
Fine Calculation Date: January 15
Interest Due on January 15: $27.25
Fine Calculation: 10% of Interest Due
The fine is calculated on January 15 as $2.72. Since this is higher than the minimum, this fine amount is stored and remains constant until the next fine calculation date (or until the fine is paid). When the next fine is calculated, the new calculated fine amount is added to any existing outstanding fine due.
Another example:
Payment Due Date: January 5
Grace Period: 10 days
Minimum Fine: $5.00
Fine Calculation Date: January 15
Interest Due on January 15: $27.25
Fine Calculation: 10% of Interest Due
In this case, the fine is calculated on January 15 as $2.72, but since this is lower than the minimum, the fine recorded on the loan account is $5.00. On the next fine calculation date (assuming the fine hasn't been paid in the meantime), the fine amount is calculated again as a percentage of interest due, then the calculated amount is added to the outstanding fine amount.
NOTE: If a member is delinquent and makes a payment that brings the fines current but doesn't bring the loan current (fines would need to be first in your payment matrix), the next time fines are calculated it will begin with the minimum fine amount all over again.
Method 1b - Interest per day, daily per diem
The delinquency fine is calculated as a percentage of daily interest due starting on the Fine Calculation Date and continuing each day until the loan is current. Example:
Payment Due Date: January 5
Grace Period: 10 days
Minimum Fine: $2.00
Fine Calculation Date: January 15
Interest Due on January 15: $27.00
Fine Calculation: 10% of Interest Due
Per Diem Interest Due: 1.20
On the first Fine Collection Date (January 15), the fine is calculated as $2.70. Since this is higher than the minimum, this fine amount is stored. On each subsequent day until the loan is current, the system will calculate a fine to be equal to 10% of the per diem interest (or 12 cents, in this case), and add that amount to the outstanding fine amount.
Another example:
Payment Due Date: January 5
Grace Period: 10 days
Minimum Fine: $5.00
Fine Calculation Date: January 15
Interest Due on January 15: $27.00
Fine Calculation: 10% of Interest Due
Per Diem Interest Due: 1.20
On the first Fine Collection Date (January 15), the fine is calculated as $2.70. Since this is lower than the minimum, the fine recorded on the loan account is $5.00. On each subsequent day until the loan is current, the system will calculate a fine to be equal to 10% of the per diem interest (or 12 cents, in this case), and add that amount to the outstanding fine amount.
NOTE: If a member is delinquent and makes a payment that brings the fines current but doesn't bring the loan current (fines would need to be first in your payment matrix), the next time fines are calculated it will begin with the minimum fine amount all over again.
Method 2 - Percentage of Payment Due (or Amount Delinquent)
The delinquency fine is calculated as a percentage of the payment amount on the Fine Calculation Date (can also specify a percentage of the amount delinquent if less than the regular payment amount). Example:
Payment Due Date: January 5
Grace Period: 10 days
Fine Calculation Date: January 15
Payment: $200.00
Fine Calculation: 10% of Payment
The fine is calculated on January 15 as $20.00 and is constant until the next Fine Calculation Date, or when the fine is paid. The next time fines are calculated, the new fine amount is added to any outstanding fines due.
The delinquency fine is calculated as a fixed fine amount on the Fine Calculation Date. Example:
Payment Due Date: January 5
Grace Period: 10 days
Fine Calculation Date: January 15
Fine Calculation: $15.00 per delinquent payment
The fine is calculated on January 15 as $15.00 and is constant until the next Fine Calculation Date, or when the fine is paid. The next time fines are calculated, the new fine amount is added to any outstanding fines due.