First thing to remember, if you Write-Off a loan in CU*BASE the membership is not closed so you are able to see the account and post payments to it directly.
When you post a payment to a loan that is Written-Off, be sure to place the member’s account number and suffix (in the event there is more than one loan) in the description.
- What you place in the description field is what will be displayed in the Allowance for Loan Loss GL 719.00 or 719.XX (if you have more than one designated Allowance for Loan Loss GL.) This will make tracking much simpler.
When you receive a recovery payment for a loan that has been Charged-Off, the membership is closed. You will need to post the payment to appropriate Allowance for Loan Loss GL.
The best way to do this is to deposit the payment into your Credit Union Corporate Account.
- Most Credit Unions have a membership under the Credit Union’s name with several sub accounts created for several different uses.
- Some have one nicknamed “Recovery PMTS” specifically for this use.
Once the recovery payment has been deposited here, you can perform a full account adjustment in Tool # 492: Member Account Adjustment (Full) to clear the account and place it into the proper Allowance for Loan Loss GL.
IT IS IMPERATIVE to put the member’s account number and suffix in the description when posting the funds into the Corporate Account and when processing the Full Account Adjustment.
If you are consistent with your descriptions, you can run a monthly report using Tool # 381: General Transaction Register on each Allowance for Loan Loss GL to see all the recovery dollars you have had either through Teller Processing to a Write-Off or through a Full Account Adjustment for a Charge-Off.
For a PDF document of the information above click here.
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