Balancing with Loan Drafts

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Loan drafts are transmitted to Portico from the pay-through bank. Loan draft amounts are not included in the online Daily Loan Recap Report 692 or the New Loans Report 080; however, loan draft amounts may be determined daily using information provided in the 450 Report.

Each morning an online 450 Report should be reviewed. This should be a part of daily opening procedures. The daily 450 Report will show all share/loan drafts processed and/or rejected. The online 450 Report will reflect:

  • Loan drafts rejected for reasons such as invalid member number or exceeded credit limit.
  • Totals for processed and rejected share/loan drafts.

When activity occurs, general ledger entries must be made daily as reflected in the examples provided, using the following general ledger accounts:

  • 805100 Share/Loan Draft Liability
  • 872200 Share/Loan Draft Suspense
  • 701xxx Home Equity Loan Principal
  • 731xxx Pay-Through Bank Account

Example 1- $1000 Processed Loan Draft

  • Credit 805100 for $1000.00
  • Debit 701xxx for $1000.00

For this example, complete the Journal Voucher – Basic Journal Voucher window to clear the liability GL for the loan draft that processed. The amount should reflect the CREDIT UNION DAILY LIABILITY AMOUNT on the daily 450 Report.

  • Debit 805100 for $1000.00
  • Credit 731xxx for $1000.00

Example 2 – $250 Rejected Loan Draft

  • Credit 805100 for $250.00
  • Debit 872200 for $250.00

If the credit union decides to reject the loan draft, complete the Journal Voucher – Basic Journal Voucher window to debit and credit the following GL accounts as indicated:

  • Debit 805100 for $250.00
  • Credit 872200 for $250.00

Rejected loan drafts cannot be returned using the Exception Items window. The credit union must call the pay-through bank to advise them of the rejected loan draft number. There is a time limit on accepting return items, so you must call the pay-through bank on the day the loan draft is rejected.

Example 3 - $750 Rejected Loan Draft #9001, which the credit union will honor.

  • Credit 805100 for $750.00
  • Debit 872200 for $750.00

First, complete a Post/Reverse Exceptions – Post Loan Draft Exception tab to debit the loan, and credit GL account 872200.

805100 872200 701xxx

  • Credit 872200 for $750.00
  • Debit 701xxx for $750.00

Next, complete the Journal Voucher – Basic Journal Voucher window to the bank to debit and credit the following GL accounts as indicated:

  • Debit 805100 for $750.00
  • Credit 731xxx for $750.00

Example 4 – Two Processed Loan Drafts Totaling $5,600.00, and One Rejected Draft for $800.00.

  • Credit 805100 for $3600.00, $2000.00, and $800.00
  • Debit 872200 for $800.00
  • Debit 701xxx for $3600.00 and $2000.00

Use the Journal Voucher – Basic Journal Voucher window to debit and credit the following GL accounts as indicated:

  • Debit 805100 for $6400.00
  • Credit 872200 for $800.00
  • Credit 731xxx for $5600.00

The credit union must call the pay-through bank to advise them of the rejected loan draft number. There is a time limit on accepting return items, so you must call the pay-through bank on the day the loan draft is rejected.