Creating Courtesy Pay Loans

Courtesy Pay Loans lets you flag a negative Courtesy Pay share draft account to automatically create a loan in the next back office cycle using credit union-defined default values. The Courtesy Pay loan brings the share draft account balance to zero and Portico disables Courtesy Pay on the account.

To create a Courtesy Pay loan, select the Create a Loan check box on the Shares – Draft Info tab. Portico will use the Courtesy Pay Loan information from the Share Profiles - Courtesy Pay tab and the system defaults on the New Loan – Setup tab to create an open-end Courtesy Pay loan in the back-office cycle. The borrower on a Courtesy Pay loan is the primary member on the account and owner of the loan; therefore, the borrower ECOA Code will default to 0 - Omit borrower from credit bureau reporting and Portico will use the ECOA Code at the loan level for credit bureau reporting.

Be sure that the Indicator field on the Loan Profiles - Account Information tab for the Courtesy Pay loan type specifies L – Line of Credit. The member’s share draft account must be negative due to Courtesy Pay, the Went Negative field on the Draft Info tab must contain a valid date, and the Create a Loan check box must be selected before a loan will automatically be created.

After a Courtesy Pay loan is created, Portico will disable Courtesy Pay on the account by setting the Courtesy Pay Option drop-down field to Not Allowed on the Draft Info tab. Any additional share draft overdraft protection options, such as overdraft protection or uncollected funds, will remain the same. You can view and maintain the Courtesy Pay loan using the Loans tabs.

The Courtesy Pay loan will remain on the system after the loan balance is zero. If the share draft account becomes negative again and the Courtesy Pay loan has a zero balance, you can select the Create a Loan check box on the Draft Info tab to perform a loan advance on the existing Courtesy Pay loan.

Any new Courtesy Pay loans will be reflected on the New Loans Report 080. All non-financial information will print on the Non-Financial Transaction Register Report 030.

The Auto Reinstate group box on the Draft Info tab allows you to automatically change the status of the Courtesy Pay share draft account once the Courtesy Pay loan is paid off. The available options for the Auto Reinstate group box are:

• Click On option to automatically reinstate the account after the Courtesy Pay loan is paid off.
• Click the Off option to not automatically reinstate the account after the Courtesy Pay loan is paid off.
• Click the Revoked option to indicate that the member has abused their Courtesy Pay privileges and this system feature is no longer available to that member.

Once the loan is paid off, if the Auto Reinstate option is Off, then the Courtesy Pay Option field will remain Not Allowed.

When Courtesy Pay is re-instated, it occurs in the PM Pass of the back-office cycle. If the credit union uses the re-post option, share drafts will post using Courtesy Pay in the AM Pass of the back-office cycle. If the credit union does not use the re-post option, share drafts will post using Courtesy Pay in the next back-office cycle. If the credit union chooses to manually re-instate Courtesy Pay, then the share drafts will post in that night's back-office cycle. ACH items are not included in repost.

You can manually reactivate Courtesy Pay on the account before the Courtesy Pay loan is paid off using the Courtesy Pay Option drop-down list on the Draft Info tab. You also can perform a loan advance on the Courtesy Pay loan before the current loan balance is paid off.

The Courtesy Pay Loans section of Courtesy Pay Loan and Charged Off Shares Report 244 displays the new Courtesy Pay Loans created and any new advances on an existing Courtesy Pay loan, including the member number, share type, note number, payment due date and payment amount.

The Courtesy Pay Loan Notice Report 695 produces notices for new Courtesy Pay loans and new advances on existing Courtesy Pay loans.