What CU*Answers Does
- After your order has been received CU*Answers Imaging Solutions programs your provided form and communicates with Lender*VP to QC and coordinate your testing.
What the Credit Union Does
- Download the reference material “Certificate Secured Loans” document received in your order.
- Attend meeting with Imaging Solutions to verify and test your forms. (May not be applicable to credit cards).
- Schedule your launch date.
- Following the instructions in the manual, select your product type, allow CD Secured Loan via online banking and the mobile app. Proceed with the configuration of your CD Secured Loan Product and Sales Information.
- After your program has launched, market your offer to all members that have not responded to the opportunity. (Recommend 1-2 weeks following your initial launch).
- Measure your progress.
- Schedule your next On Demand Promotion.
The Member Experience
- When a member logs in to online or mobile banking, an offer will be presented in a way that makes it clear the loan is theirs for the taking, and that a simple click will open the account so they can immediately assess the available funds.
Reference Materials
https://www.cuanswers.com/wp-content/uploads/DepositSecuredLoans.pdf
Note for Consideration – Military Lending Act
MLA grants a number of protections for active-duty service people and imposes specific requirements on the credit union in granting credit. At the heart of the matter is the calculation of the Military Annual Rate (MAPR) and the disclosures required prior to or at the time of extension of credit. The act requires that a unique APR be calculated incorporating things such as fees and credit life or disability. The MAPR may not exceed 36%. CU*Answers published a document in November of 2016 outlining the nuances of this calculation along with a flow chart for lenders to use when granting credit to active duty personnel. Also, for credit cards there are additional statement disclosures including the calculation of MAPR in the event credit life and disability would increase the rate above 36%. CU*Answers does not support this disclosure and in 2016 recommended credit unions not include the sale of credit insurance products to active duty military personnel. On Demand credit cards does not allow the member to elect credit insurance products and it is not recommended that any type of application fee be assessed that may drive the MAPR above 36%.
The act also requires certain disclosures including the following. “Federal law provides important protections to members of the Armed Forces and their dependents relating to extensions of consumer credit. In general, the cost of consumer credit to a member of the Armed Forces and his or her dependent may not exceed an annual percentage rate of 36 percent.” This rate must include, as applicable to the credit transaction or account: The costs associated with credit including fees for ancillary products sold in connection with the credit transaction; any application fee charged (other than certain application fees for specified credit transactions or accounts); and any participation fee charged (other than certain participation fees for a credit card account). Oral disclosures are also required which can be done in person or by providing a toll-free number where the disclosure is recorded. Such disclosures can be included either in the configuration of the sales messages or providing the member with a link where the disclosure and 1-800 number can be found. The member may not complete the offer without agreeing that such disclosures have been read.
In the event the credit union feels it may violate any of the above it is recommended that On Demand credit cards be offered only to those not in active duty. The active-duty data element can be pulled with the consumers soft pull credit report and can be used to create the population of members you wish to make the offer too while excluding any individuals with a positive active military status on their credit report.
