Best Practice: Examine the Exception Report Everyday

Cindy Fisher | April 24, 2019

Last week we discussed the importance of examining the Card Log every day. The Card Log will show you which card payments were rejected in the afterhours and why.

For ACH payments, we have a similar report called the Afterhours Exception Listing. This is a report that shows which transactions were rejected last night during afterhours processing.

Payments can be rejected one of two ways:

  1. Payments can be rejected by our system in the afterhours of the payment date if the account has certain conditions that would cause the payment to reject.
  2. ACH payments can also be rejected through the ACH payment network routed through the Federal Reserve Bank (NACHA). Any payments rejected through the ACH network are returned with an ACH Return Code, such as insufficient funds (R01), account closed (R02), or invalid account number (R04). These returns can take anywhere from two to five days to get back. We will discuss the process of reversing payments due to ACH rejection in another post.

Afterhours Exception List

When ACH payments are rejected in the afterhours, the payment is not applied to the account. Accounts can appear on the Afterhours Exception list for many reasons. A common reason is recurring ACH payments being rejected in the afterhours.

When recurring payments are rejected in the afterhours by our system, they show on the Afterhours Exception Listing with a reason of why the payment was rejected for that account. It even includes a message explaining how to handle the account going forward, as shown below:

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You should designate someone at your institution to study that report every day. It can be viewed from GOLDView Plus in CIM GOLD, as shown below:

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The following are possible reasons for recurring payment rejections in the afterhours and how to resolve them.

Loan Past Maturity:

There’s a tricky little option on the Loans > Account Information > Payment Information screen called “Stop Recurring Payment at Maturity.” If this option is selected and an account reaches maturity (the current payment date is greater than the Maturity Date on the loan), the payment will be rejected and the account will show on the Exception Listing with this message:

“Loan Past Maturity – Payment Not Processed. Remove Recurring Payment From Account.”

Users will need to click <Discontinue Recurring Payment> on the EZPay screen. Then follow your institution’s policies, such as contacting the borrower about making a lump sum final payment or rolling the loan into a new loan.

Principal Balance Would Go Negative:

This occurs when a recurring payment would pay off the loan, but the option to not allow recurring payments to pay off a loan is set. The borrower would need to be contacted about paying off the loan. You can use this as a marketing tool to renew loans. See the Recurring Payments at Payoff topic for more information.

CAUTION: If you do not discontinue recurring payments once they show on this report, the system will continue to attempt to process the payment every afterhours. This can be especially problematic if the account earns daily interest.

Example: An account has $100 left on the Principal Balance. A recurring payment of $130 is set every month. The EPOP SPYO (Allow Scheduled Payments to Payoff) is not set up for your institution.

The last payment of $130 is rejected and the account is sent to the Exception file with the message “PRINCIPAL BALANCE WOULD GO NEGATIVE.” No one bothers to discontinue the recurring payment.

Over the next week, the account accrues interest of $35. The afterhours process runs, and now the account has enough in the balance for the recurring payment to post. The ACH transaction posts and is sent to the external deposit account for fund withdrawals of the payment. This is why checking the Exception report is so crucial.

See the Recurring Payments topic in the EZPay User’s Guide for more information.

Tags: Reporting, training

Cindy Fisher | April 24, 2019

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