Overdraft Protection
Overdraft Protection loans are lines of credit attached to a checking account to prevent declined transactions.
Overdrafts Protection loans are a line of credit that count toward the unsecured limits that members may borrow. Connections offers limits ranging from $200 to $2,500. Higher limits must be approved by the CEO or CLO.
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Overdraft loans follow the same qualifying procedures and policies as other loans.
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Overdrafts have a fixed interest rate of 18%, no matter what the member's FICO score is.
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When keying an overdraft, the term should be set to 360 months. This will set the maturity date out 30 years and ensure that the loan does not mature and freeze withdrawals any time soon.
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We can do a Share Secured Overdraft just like we do a Share Secured Visa. It can be for any limit but the limit on the overdraft must match the secured amount in the account.
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A good rule to follow when setting the limits is that if the member wants a $500 limit, if we set the limit at $499, then the payment will never be more than the $25 minimum. If they want it to be $1000, if set the limit at $999, then the payment will never be more than the $50 minimum.
Loan Balance Minimum Payment
$ 0.00 - $ 25.00 Balance of loan
$ 25.01 - $ 499.00 $25
$499.01 - $ 999.00 $50
$999.01 - $2,500.00 $100
After booking an Overdraft, the overdraft path must be set up between the Checking Account and the Overdraft Account in Member Services. When do we need to collect the title fee from the member on a collateral loan? Remember to set the overdraft limit in the path to match the loan limit.
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If the overdraft is being added to an established checking account, then the last step, and a VERY important step, is emailing the support center at supportcenter@connectidaho.org so they can connect the debit card to the overdraft in Co-op.