If your regular share account is set up with a split rate, assuming the majority of your accounts are at the base rate, most credit unions elect to use that rate as the average rate on the call report. The call report is looking for an average rate, not a weighted one. If you wanted to calculate the weighted average rate on a split-rate share product for other reasons, you could use Tool #344 Div/Int Split Rate Forecasting. Take the Total Forecasted Dividends, divide by the Total Average   More...

The CD, Share Draft, or Share loan configuration screens allow you to offer the member any rate equal to or greater than the current certificate or savings product rate. There is no check on your general rate tolerance settings when configuring a CD Secured loan product. If the rate is tiered, then the member will be offered a different rate on their loan depending on the rate of their deposit account The amount the member can borrow is limited to the balance of the deposit account minus any am  More...

The following applies only to credit unions that have activated the Text-To-Speech (TTS) engine for CU*Talk Audio Response. You can use Tool #506 Member Rate Maintenance to control product rates read to members in CU*Talk Audio Response. But keep in mind that because you are using Text-To-Speech, changes made here directly affect the credit union website and It's Me 247 online banking as well. Once in the menu option, select shares or certificates. From the next rate menu you will see a   More...

Yes, the share and certificate club rate benefits do add to Dividends Paid YTD. However, the loan interest rebate amounts do not affect the loan interest paid YTD amount. They are not savings dividends. They are a benefit that is accrued throughout the month based on the loan balance but paid to a savings account at end of month.

If you configure product as a Qualified Dividend product, it must be configured to earn dividends. NOTE: For a Qualified Dividend product with a plateau rate, the lowest plateau does not necessarily need to earn dividends, but a higher plateau must earn dividends. You activate a product as a Qualified Dividend product by entering an A in the Qualified Dividend processing field on the Dividend tab of the Share Account Setup screen (Tool #777, then Detail). Learn more about Qualified Dividends  More...

Yes. A processing fee can be charged when the member opens the loan. The fee must come from a savings or checking account and cannot come from the new loan account. Your credit union can even elect not to charge an increased interest rate on the loan and simply earn money on your loans with these fees. If a member does not complete the process to open the loan (for example fails to complete a required promissory note), a loan application is created and is sent to the loan queue. The processin  More...

The decay rate is an analytical term used to describe the manner in which non-maturity deposits (NMDs) run off or “mature” over time as members leave the institution for whatever reason—relocation, a job transfer, retirement, dissatisfaction with service, and so on. A decay rate of 25%, for example, means that 25% of the beginning balances in a particular account such as shares will be permanently withdrawn in the first year. In the second year 25% of the remaining balances will be withdrawn and  More...

Because there is no regulation to require APY to be displayed, CU*BASE has no option to do so. Since shares and certificates can have more than one rate during a statement period, the APY displayed at the end of the period would be inaccurate. However the Truth-In-Savings regulation does require an APYE disclosure statement on shares, this automatically displays when a dividend is posted. Certificates are not part of this requirement.

NMDs refer to non-maturity deposits which are share drafts, shares and money market accounts. These accounts have unique risk-reducing properties that are not always reflected an ALM analysis. The funds in an individual share draft account, for example, are immediately withdrawable and the balances tend to be quite volatile. However, when viewed collectively, such balances tend to be stable, dependable and they behave as if they are much longer-term deposits so they can be used to fund longer te  More...

(1) Generically, open source refers to a program in which the source code is available to the general public for use and/or modification from its original design free of charge, i.e., open. Open source code is typically created as a collaborative effort in which programmers improve upon the code and share the changes within the community. Open source sprouted in the technological community as a response to proprietary software owned by corporations. (2) A certification standard issued by the Ope  More...

Loan Rate Benefit Calculation: (Benefit / 100) / 365 (or 366) = Daily Factor (truncated to 9 decimal places) Daily Factor x Current Loan Balance = Daily Benefit Accrual (rounded to 2 decimal places) Ex: Rate Benefit = .250, Loan Balance is $10,000.00 .250/100 = .0025 .0025 / 365 = .000006849 .000006849 * 10,000.00 = .068 rounded to .07 Share Rate Benefit Calculation Benefit / 36500 (or 36600) = Daily Factor (truncated to 8 decimal places) Daily Factor x Current Share Balance =  More...

Setting the regular share rate or any other deposit rates can be delegated by the Board to management. The rates should then be “approved” or “ratified” by the Board at the next board meeting. Because of the range of deposit products now offered by most institutions and the volatility of the financial markets, the ability to respond promptly to changing market and competitive conditions is a critical issue for management.

Yes, the share and certificate club rate benefits do add to Dividends Paid YTD, therefore are reporting in the IRS totals. However, the loan interest rebate amounts do not affect the loan interest paid YTD amount, therefore not reflected in IRS totals. bonus rebate

A LAN (Local Area Connection) is a computer network that spans a relatively small area. Most LANs are confined to a single building or group of buildings. However, one LAN can be connected to other LANs over any distance via telephone lines and radio waves. A system of LANs connected in this way is called a wide-area network (WAN) . Most LANs connect workstations and personal computers so that many users can share expensive devices, such as laser printers, as well as data. Users can also use the  More...

Although gap may still be used in some institutions, it is an outdated procedure that has been replaced by far more effective analytical procedures such as multi-period income simulation and net economic value ( NEV ). The gap approach attempts to determine the volume of assets and liabilities that reprice within specified periods but it does not consider the timing or magnitude of the repricing that may occur during those periods. This is a major defect because it is well-recognized that many a  More...

The average maturity is one of several critical inputs necessary to compute the NMD valuation for NEV purposes. The deposit flows must be evaluated going back in time and in the context of a “closed sample”. This means that the historical behavior of a large group of accounts must be studied to determine when, on average, their deposits leave the institution. This behavior determines the estimated average maturity. There are other procedures that may be used but disruptions in the financial mark  More...

The marginal cost of funds is the additional or incremental cost associated with raising a dollar of new funds. For example, if a share account has balances of $10 million at a current cost of 2%, the annual cost is $200,000. If the rate is raised to 2.5% in an attempt to bring in say, $1 million in new deposits, the incremental dollar cost would be ($11 Million x .025)-$200,000= $75,000. This results in a marginal cost of $75,000/$1 Million=7.5% rather than 2.5%. Viewed another way, in additi  More...

Examiners determine the total amount of assets with final maturities or terms 5 years or longer and divide this number by total assets. Although there is a lack of consistency in the application of this ratio, the numerator usually includes all fixed-rate mortgage loans, ARMs that reprice in 5 years or longer and fixed-rate investments with maturities 5 years or longer. When this ratio exceeds 25%, this is presumably a “red flag” that indicates the possible presence of interest rate risk. There   More...

This is one of the most common ALM-related questions. Unfortunately, there is no single number that is appropriate for all lenders. The answer varies from one institution to another and depends on the interaction of a variety of factors including asset-related offsets such as a short investment portfolio and the amount of ARMs and HELOCs. The amount of capital and the characteristics of the funding on the deposit side also play a major role in determining the amount of such loans that may be h  More...

For Fee rewards, you can use the CU*BASE Fee Waiver Report . This will give you either all waivers (by CU*BASE and manual) or manual only. (See link below for more details.) For Loan Benefits - You can find a report in CU*SPY using the Loan Account Activity category called: Loan Club Benefit Payment Transaction Register (TLNBENC) and also and exception report (TLNBENC2). These benefits pay monthly, so look on the last day of the month. For Certificate Benefits, use CU*SPY category Share Acc  More...