Pledge Record

You can create Pledge records in Account Manager at the Loan record level (LOAN PLEDGE) by right-clicking the Loan record, at the Account record level (PLEDGE) by right-clicking the Account record, and at the Application record level (LOANAPP PLEDGE) by right-clicking the Application record.

Account-level Pledge records can only be used with the Collateral & Document Tracking system.

For Application Pledge records, see Application Pledge Record Fields.

The system automatically creates a Collateral Hold record when a Pledge record is created if the Pledge Type field is set to (5) Collateral. Each Collateral Hold record, accessible in the Collateral Manager, represents a link from a Collateral record to an account-level Pledge record, an Application Pledge record, or a Loan Pledge record when collateral tracking is used during loan processing.

The Daily Posting Batch Program looks for paid-off loans that have unexpired Pledge records. If a loan has a populated Close Date field, the Pledge record is expired, along with any corresponding Collateral Hold record.

Note: If you delete a Pledge record that has the Pledge Type field set to (5) Collateral, the system deletes the corresponding Collateral Hold record.

The Pledge record includes the following fields:

Pledge Type

This field identifies the purpose of the Pledge record.

Data Type Descriptions

(0) Share Secured

The Pledge record identifies a share pledged as security for a loan. Use this option if a loan is secured partially or completely by a Share record.

If you choose this option when you create a Pledge record, and if the Loan record has the Secured Code field set to (1) 100% Share, (2) Partial Release First, or (3) Partial Release Last, the system creates a Hold record under the Share record specified at the Share ID field.

Each time the member makes a loan payment, the system reduces the value in the Secured Amount field in the Loan record and the value of the Hold Amount field in the Share Hold record by the amount of the loan payment applied to principal. When the loan is paid off, the system resets both the Secured Amount and the Hold Amount fields to 0.00.

(1) Cosigner

The Pledge record identifies a cosigner for a loan. If the cosigner is a credit union member, you can use the Pledge record to cross-reference the cosigner’s account for credit reporting and mailing delinquent notices. If the cosigner is not a credit union member, you must also create a Name record under the Pledge record.

(2) Collateral Owner

The Pledge record identifies the owner of collateral pledged for a loan. Use this option if a loan is secured by collateral owned by a person other than the account holder. If the collateral owner is not a credit union member, you must also create a Name record under the Pledge record.

(3) Portfolio Secured

The Pledge record identifies stocks pledged as security for a loan. The member must have a Portfolio record. Although not required, you can also have at least one Portfolio Tracking record to define the type and value of stocks owned and the stock amount available for pledging.

When calculating the portfolio balance and the amount available for pledging to a loan, the system excludes portfolio stock Tracking records where the expiration date or the release date has been reached.

(4) Guarantor

The Pledge record identifies a guarantor on a loan. If the guarantor is already a credit union member, you can use the Pledge record to cross-reference the guarantor’s account. If the guarantor is not a credit union member, you must also create a Name record under the Pledge record.

Some guaranty agreements specify the guarantor’s liability as a percentage of the outstanding loan balance, and others specify the liability as a fixed dollar amount.

The Pledge Rate or Pledge Amount field should contain the appropriate data when this pledge type is specified. The Pledge Rate field lets the user specify the percentage of a loan guaranteed by the guarantor, and the Pledge Amount field is used when the guarantee is expressed as a fixed dollar amount. Both fields cannot be used for the same pledge type.

(5) Collateral

The Pledge record is associated with a Collateral record.

If this option is selected for a Loan Pledge record, the following fields are not used and cannot be revised:

• Account Number
• ID
• Collateral Code
• Pledge Rate
• Pledge Amount

This is the only option available when you create an Account Pledge record, and the above fields are not even displayed.

Account Number

This field identifies the account pledging security for a loan. This field is not used if the Pledge Type field is set to (5) Collateral.

• Type * to look up account numbers. When the Select Account window opens:
  • Use the normal Select Account functions to find an account, and then click OK.
  • Click Cancel to have the system enter the account number for the account in which you are currently working.
• Select the account number (up to 10 characters) of any other account referenced by the Pledge record (for example, a cosigner’s account).
• Leave this field blank (press the space bar) if the cosigner or collateral owner is not a credit union member.

Note: When the this field is populated in a Pledge record that has the Pledge Type field set to (1) Cosigner, and the Incl Name for Cosigner Loan Pledge Rec prompt in Trial Balance Reports is set to YES, Symitar reports the primary member of the account entered in this field as coborrower on the loan. In other words, Symitar does not report the member listed on the Loan Pledge Name subrecord created under the Pledge record when the Pledge Type field in the Pledge record is set to (1) Cosigner. If the primary member on the account entered in this field is the same member as the primary member that belongs to the loan, Symitar does not report the same primary member twice.

Tip: Do not populate this field if the Pledge Type field is set to (1) Cosigner. Instead, leave this field blank and create a Loan Pledge Name subrecord under the Cosigner Pledge record and populate the member details in the Loan Pledge Name record. They will be included in the Credit Report Tape if the ECOA Code field in the Loan record is set to (2) Joint Contractual or (5) Maker and the Incl Name for Cosigner Loan Pledge Rec prompt in Trial Balance Reports is set to YES.

ID

This optional field identifies a share or portfolio pledging security for a loan. This field is not used if the Pledge Type is (5) Collateral.

• Enter the ID of a share or portfolio pledged as collateral for the loan.
• Enter * to look up share or portfolio IDs.

Note: If you attempt to leave this field blank after selecting it, or if you attempt to save the Loan Pledge record with this field blank, the system displays the following error message:

Error: ID cannot be blank

Collateral Number

This field references the Collateral record associated with this Account Pledge record.

This field is used only if the Pledge Type field is set to (5) Collateral.

• Enter the collateral number of the Collateral record associated with this Account Pledge record.
• Type * to look up collateral numbers.

Note: If you attempt to leave this field blank after selecting it, or if you attempt to save the Account Pledge record with this field blank, the system displays the following error message:

Error: Collateral not found

Collateral Description

The system copies this field from the associated Collateral record’s Description field. The first 20 characters are displayed in the Pledge record in both the Application Processing Tree and the Account Manager Tree.

This field is used only if the Pledge Type field is set to (5) Collateral.

This field cannot be updated.

Effective Date

This field stores the creation date of the Pledge record or, if entered manually, the date this Pledge record can be used.

This field is used only if the Pledge Type is set to (5) Collateral.

Expiration Date

This field stores the date this Pledge record should expire.

This field is used only if the Pledge Type field is set to (5) Collateral.

The system sets this field when the loan is paid down to a zero balance. You cannot perform file maintenance on this field.

The system automatically updates the corresponding Collateral Hold record’s Expiration Date field with the value entered in this field.

Record Change Date

The system stores the system date in this field when you create, change, or save the Pledge record.

There will be times when the system updates this field because the record was saved, even though there may not be any actual changes in the record.

Note: The system does not change this field when a calculated field changes.

You cannot perform file maintenance on this field.

Collateral Code

This field contains a user-defined code used to identify the collateral pledged for a loan. You can use this field to categorize types of collateral for reports and displays. This field is not used if the Pledge Type is (5) Collateral.

Enter a credit union-defined code (0–999) to identify the collateral pledged for a loan.

Pledge Rate

Use this field to specify the percentage of a loan secured by a pledge; alternatively, you can use the Pledge Amount field to specify a dollar amount secured by a pledge.

If you enter a rate in this field, type 0 in the Pledge Amount field; if you enter an amount in the Pledge Amount field, type 0 in this field.

If you have multiple loans set at a pledge rate, the loans pay down evenly, at the same time.

This field is often set at 100%. This allows a member to secure the full balance of a loan with the designated share even as payments lower the balance.

If you secure a loan by pledging a number of different shares, you must create additional Pledge records to secure the total loan balance. For example, if you secure a loan with five Share records, you must create five separate Pledge records that each specify a pledge rate.

• Type 0 if the pledge secures a specific amount.
• Enter the percentage of the loan balance secured by this pledge. If the Pledge Amount field is set to 0, the system subtracts the balance change amount from this field every time a transaction affects the loan.

Pledge Amount

Use this field to specify the dollar amount of a loan secured by a pledge; alternatively, you can use the Pledge Rate field to specify the percentage secured by a pledge.

This field is not used if the Pledge Type field is set to (5) Collateral.

If you enter an amount in this field, type 0 in the Pledge Rate field; if you enter a rate in the Pledge Rate field, type 0 in this field.

• Type 0 if the pledge secures a percentage of the loan balance.
• Enter the specific amount secured by this pledge. If the Pledge Rate field is set to 0, the system subtracts the balance change amount from this field every time a transaction affects the loan.

If you have multiple loans set at a pledge amount, the loans are paid one at a time.

Collateral Priority

This field indicates the priority of the collateral associated with this Pledge record. This field is used only if the Pledge Type is set to (5) Collateral.

Data Type Descriptions

(0) Other

(1) Primary

(2) Secondary

Non-Displayed Fields

These fields do not appear in the system and are only accessed by PowerOn specfiles or SymXchange.

Locator

The system stores a unique number within each member account in this field that can be used as a unique identification of this record.

The system automatically assigns a value in the Locator field when the record is created, and you cannot change it. The value in this field can be used as a unique identification of a specific record. The value is a positive number.

The Locator field can be used during PowerOn file maintenance (both on demand and batch) to uniquely identify a record. Using the Locator field is recommended since a record’s ordinal sequence number may change if someone else inserts or deletes a record with a lower ordinal sequence number just before you post your file maintenance.