We currently have two major recipes we’re cooking related to our Contract Variable Rate Loan features: adding support for automated payment changes on LOCs that are prompted by a change to the variable rate itself, and revamping the contract variable rate change notices.
Automated Payment Changes for Contract Variable Rate LOCs Upon a Rate Change
This project will add new functionality to Variable Rate Contract Loans in order to support automated payment changes prompted by a change to the rate on a MEMBER6 loan (LOCs and other open-end loans) with a contract variable rate code. CUs will be able to elect to do automated payment changes prompted by a variable rate change, either using the existing maturity date on the loan, or by recalculating a new maturity date according to a table of terms based on the loan’s balance.
While CU*BASE can already handle automated payment changes when rate changes are applied to MEMBER5 mortgages and other closed-end loans, there is no similar mechanism to properly calculate the new payment on open-end loans such has HELOCs in MEMBER6.
To meet this need, we’ll be adding add new flags to the contract itself to allow CUs to choose:
- Should a rate change prompt a change to the member’s payment?
- If yes, should the payment change cause the loan’s maturity date to be changed? If not, what term should be used to calculate the payment? (Will provide a table with balance ranges and terms only.)
- How long should the delay be between changing the rate and calculating a new payment (so notifications can be sent), and what should the minimum payment amount be?
In other words, a credit union could elect to do automated payment changes prompted by a variable rate change, using only the “Table” method that’s available for payment changes due to disbursements, but with more limited options.
Status as of May 2023: Project #60112 was implemented with the 23.05 release.
Revamping Contract Variable Rate Notices
Customizing Notice Content
Notices for rate/payment changes on Contract Variable Rate loans are currently via a standalone tool, independent of our normal member notices. Unlike regular notices, these are currently not customizable, making it more difficult for CUs to be creative with their contract products. With this project, Contract Variable Rate notices will be removed from the current tool so that they can be configured and printed via our standard member notices feature. This would allow notice content to be completely customizable by the credit union, so that they could work to equally well for HELOCs and closed-end loans alike.
We’ll also be adding some additional flags to the contract itself so that notices can be triggered twice in advance of a rate change, at whatever intervals the CU wishes. So there would actually be two new notice events, one that could be triggered, say, 6 months in advance of a change and another that could be triggered 30 days ahead. Both would be customizable via the standard notice event and form functionality already available in CU*BASE.
Status as of May 2023: Project is currently in early design stages.
Your chef for these recipes: The Lender*VP Team