Underwriting Codes: Overview

In the past, if a credit union decision maker wished either to deny or to approve a member's loan on the CU*BASE system, it meant that either the account had to be created or the actual loan request be processed as a denial. An interim step was needed to allow a “memo” posting of the decision, pending action.

With CU*BASE tools, a loan application can be worked by more than one credit union employee, and the status can be communicated to the member or any other credit union employee through an Application Status inquiry or a report. This is often used by multiple-office credit unions where approvals on loan requests/applications must be obtained from a second party before the actual account is created.

In most cases, member loan requests are granted some form of action (whether approval or denial) immediately, but certain situations may require some delay. In these cases, either a reply to the loan interviewer or a member's inquiry into the status of the request comes into play.

The “Underwriting Control” System Flag

To ensure that Underwriting Codes are used consistently according to your credit union's policies, a special system control is available: Use Underwriting Control.

If this control is activated, the system will not allow Create Loan Account or Deny Loan on the Loan Recap screen to be used without the proper Underwriting Code being entered.

Underwriting Codes also have their own security system to prevent an unauthorized user from marking a loan with an underwriting code. The Underwriting Control feature adds another layer to that security, by preventing a loan from being created or denied unless an underwriter has marked the loan request. In other words, to create a loan, there must be an “A” (approval) type Underwriting Code on the loan request, and to deny a loan, there must be a “D” (denial) type code in place. Without this control, a loan that has been marked “denied” by an underwriter could actually be created.

This control is only necessary if your credit unions wishes to make the use of underwriting codes mandatory in order to allow the creation or denial of a loan. You may still use the full functionality of the underwriting codes system, including employee security for entering the codes themselves and making changes to existing loan requests, regardless of the setting in this control.

In addition, the system will always check to see if a person has proper security clearance to create a loan account or process a denial notice. The main difference with this control is whether or not an Underwriting Code must be assigned in order to process the loan account. Turning this control on provides the highest level of control and security.

Remember, this new employee security only applies when a user tries to actually create a loan or process a denial notice from the Loan Recap screen. All employees that have access to the tool can create a loan request, fill out an application, and check loan details at any time.

What are Underwriter Approval Limits?

Credit unions can restrict the dollar amount that a loan officer can either approve or deny. These limits are configured through the use of Underwriter Approval Limits. Loan Underwriter Limits are activated in the Master CU Parameter Config. Once activated, CU*BASE refers to the Loan underwriter limits before allowing any loan officer to approve or deny a loan when the underwriter code is set to use “underwriter security & approval limits.” (This italicized text is conditional, appearing once the underwriter approval limits feature is activated.)

Related Reference

Configuring Tools for Your Loan Team (NOTE: A PDF version of this booklet will open.)

Underwriting Codes Configuration

Underwriter Approval Limits

Employee Special Security

Application Status Inquiry

Entering Underwriting Codes on the Loan Recap Screen