In order to take a loss on an overdrawn base share (000) account (closing the entire membership), do the following:
  1. First make an adjustment to zero out the balance for the amount of the loss and assign it to the general ledger account associated with this type of loss, per your credit union policies and procedures.  
  2. Then close the membership.
  3. Per your credit union policies and procedures, you may also add this member to the blocked persons database using Tool #892 Update Fraud Alert/Blocked Persons List.  This will advise the credit union of the loss taken, should they attempt to open another membership in the future.
IMPORTANT NOTE:  This method of taking a loss on an overdrawn base share account is separate from the Savings/Checking Charge Off feature (Tool #201).  When using Tool #201, a charge off reason code is assigned to the account.  Accounts charged off with a charge-off reason code have other available reporting, monitoring, and analytics tools associated with them that would not count or be available to a base share account that is charged off in the manner covered here.  Additionally, since Tool #201 is not used, this loss cannot be reported to the credit bureau using the optional one-time reporting feature.