What types of things might prevent a primary borrower or additional signer from being applied by the bureau?

If you or your member notices an account is not being updated (or the additional signer on a loan) you should first, try to find out if the loan/additional signer was included in the file sent over to the bureau. You can do this for the most recent reporting cycle by running Tool #658 Print Loan Info Sent to Credit Bureau.

If the member loan/additional signer information (defined by METRO 2 as the J1 segment or J2 Segment) is present in that file you need to look further into the following types of items:

Does the member’s name contain any punctuation? The bureau does not accept any punctuation in the name, even for hyphenated last names. This goes for both primary members and additional signers.

1. Does the member/additional signer’s address contain any invalid characters? Again, the bureau doesn’t want any punctuation other than hyphens (-) and forward slashes (/). They will use the postal certification of an address (“CASS”) for the most part; however, CASS does allow things like ‘#’ for apartment number, etc., and the bureau will not allow for use of ‘#’ sign. Therefore, be careful when entering new membership or non-member information to set them up, without punctuation, so that it doesn’t affect you down the road.
2. When reporting additional signers, please note that the bureau only allows for two additional signers to be reported. The caveat to this is that they will accept only one additional signer with the sameaddress as the primary borrower (J1 Segment) and one additional signer with a different address from the primary borrower (J2 Segment). So, if you have a situation where both mother and father signed as co-borrowers with their child and all three live at the same address, only one of the additional signers will be sent to the bureau.
3. Just a reminder that the bureaus to which CU*Answers reports are USA region based. If members are flagged as having a foreign address, those will not be applied by the bureau so we do not send them.
4. Any individual to whom you have granted a loan that is not of age to enter a contract is not sent on to the bureau, as they will not apply the record. This means anyone under the age of 18.
5. One of the other reasons that an update to a loan might not be applied at the bureau is if you use a combination of comment and status codes that they restrict. Most CBX screens have warning and error messages to help assist you in preventing these types of errors.
6. The timing of the report being updated at the bureau once the file is remitted can affect the data. This can take from one day to fifteen days. There may not be notification once the file is updated.
7. Other errors that can cause the file not to update include an error in a bureau reporting code, such as purpose, security or the Equal Credit Opportunity Act.

If the record does appear in our reporting file but is not applied, the next step is to contact the bureau to see if they had a problem posting your file, or a problem with that individual record. If you could share any information they provide to you with CU*Answers, then we can try and address the situation for all credit unions so it will not happen again for you or anyone else.

If your circumstances do not meet any of the above situations, please contact a Client Service Representative (“CSR”) and provide them with examples so we can assist you in resolving your particular issue.

Consider that once you have been advised that a member has a discrepancy with their credit report, in addition to making the appropriate correction in CBX, you should also make the correction immediately through e-Oscar. This is to ensure that you address the error within the regulatory timeframe to do so. You can follow the necessary research and make corrections if warranted or, if appropriate, send the results of your research on to a CSR so that we can take any steps necessary to prevent the situation from occurring again.

Learn More in the Answerbook

Does CBX support Risk-Based Lending strategies?

Yes, CBX supports risk-based lending. CBX provides tools for pricing loans based upon the Credit Score/Paper Grade received. A credit union should check with its applicable credit bureau(s) for Decisioning Products available to facilitate this process.

Learn More in the Answerbook

We have a loan serviced by another financial institution that we are participating in. Our auditors have asked us to make sure that it is viewed as a loan, but we have it configured to be an investment on CBX. How should this be configured?

Within CBX the Participation Lending software is for managing member loans and investor positions. With this the member record is serviced by your credit union and therefore recorded as an actual member loan.

If your credit union is purchasing into a loan serviced by someone else and you would like to manage your investment in participation offerings by others, this can be done through CBX Investments subsidiary software. Some key area to focus on:

• You will use Tool #993 INV 1: Work With CU Investments to set up the investment, making sure to enter the correct rate being used on the loan account.
• For 5300 Call Report reporting, you’ll also want to use the 715.xx GL account series. The 715.xx GL account is listed as LOAN PARTICIPATIONS PURCHASED on the NCUA-recommended chart of accounts and would correlate to the situation where your credit union is buying into a loan at another institution.
• Make sure that your financials have a GL range for loans that includes the 715.xx series. In this scenario it will be marked on your financial as a loan, and you’ll be tracking it as an investment on CBX. The GL range for your financials can be updated through Tool #376 Financial Report Configuration.

Learn More in the Answerbook

When are we required to itemize finance charges on HELOC statements?

The Issue

A recent exam finding raised a question: do loan origination fees need to appear on a HELOC’s first periodic statement?

The Regulation Z Framework

Regulation Z governs how finance charges are disclosed on open-end credit accounts like HELOCs.

1. Are loan origination fees “finance charges”?
   • Yes. Under 12 CFR § 1026.4(b)(2), finance charges include “points, loan fees, assumption fees, finder’s fees, and similar charges.” Origination fees fall squarely in this category.
2. Do finance charges always appear on the periodic statement?
   • Not always. It depends on how the fee was paid.

Two Scenarios

1. Fee paid from a share account (before or at closing)
   • If the member pays the origination fee out of their share account — separately from the HELOC itself — it is a prepaid finance charge under 12 CFR § 1026.2(a)(23).
   • In this case, 12 CFR § 1026.7(a)(6)(i), Comment 8 provides an exception: fees paid prior to the first periodic statement and not financed as part of the plan do not need to appear on the periodic statement.
   • No itemization required on the statement.
2. Fee paid from the first HELOC advance
   • If the origination fee is pulled from the first draw on the credit line — even if it passes through a share account momentarily — it is considered financed as part of the plan. The same commentary in § 1026.7 is explicit: in that case, the fee must be disclosed as a finance charge on the first periodic statement.
   • Itemization on the first statement is required.

What This Means for Your Credit Union

The key question is simple: Where did the money actually come from?

If your credit union charges origination fees directly to the HELOC (or draws from the first advance to cover them), those charges must be itemized on the first periodic statement.

EXAMPLE: A member wants a $2,000 draw from their HELOC, which results in $500 in fees. They take a $2,500 draw from their HELOC (the original $2,000 they wanted plus the $500 in fees). That is considered paying from the initial draw which would require the fees to be itemized on the periodic statement. The regulation does not stipulate that fees need to be itemized at the bottom of the statement, therefore credit unions can remain in compliance by using the member account adjustment tool (Tool #492) to make individual entries on the loan suffix with a description of the entry (i.e., the fees). This will satisfy the requirement to itemize the fees under the HELOC suffix on the periodic statement.”

If, however, your credit union collects the fee from a separate share account at closing, and that amount is never added to the HELOC balance, you are not required to list it on the periodic statement.

Bottom Line

Make sure the payment source is clearly documented. If fees are financed through the credit line in any way, confirm the first statement reflects that. This small process check can prevent an exam finding in the future.