Multiple NACHA Returns

Introduction

LoanPro offers options to automatically change the status of a payment profile based on failed ACH payments through our NACHA Returns functionality. However, NACHA Returns is limited to making changes based on a single return code on a single payment. Multiple Returns, on the other hand, offers a lot more flexibility. This article will describe the Multiple Returns function LoanPro offers to create triggers for based on multiple returns on a single payment profile.

How can Multiple Returns help me follow the CFPB's Small-Dollar Rule?
With the new Small-Dollar Rule going into effect, one of the main worries for lenders is the rule’s requirement that if a payment profile (e.g. bank account) has two consecutive failed payments, even for two different loans subject to the rule, then the lender must obtain reauthorization before they can try to process another payment. By setting the correct Multiple Returns trigger, you can set the system to automatically inactivate or cancel any AutoPays using a payment profile that has had two consecutive failed returns.

Multiple Returns

With Multiple Returns, you can set up rule-based actions that will be taken based on the failure of a payment or multiple payments for a payment profile. To access Multiple Returns, navigate to Settings > Company Settings > Merchant > Multiple Returns inside your LoanPro account. This will take you to a screen listing all previously created multiple returns rules.

In order to create a new multiple return, click the blue add button in the upper right corner. This will take you to the creation screen, which is split up into three sections.

Qualifiers

The Status and Name fields in the first section (shown below) have to do with the multiple return itself. The Status field is automatically set to 'active,' but can be set to 'inactive' if needed. The Name field is the only required field (as indicated by the red asterisk), allows you to give each multiple return a unique name in order to distinguish it from any others.

The remaining three fields, NACHA Returns, Number of Returns, and Evaluate Based On, are 'qualifiers.' These are the fields that let the system know which returns on a payment profile qualify it to trigger the multiple return.

  1. NACHA Returns is a field that allows you to select a specific return code to be included in the rule. By clicking the + button beneath the field, you can select more than one return code. For a list of all return codes, take a look at our NACHA Returns article.
  2. Number of Returns lets you choose how many returns you want to allow on the payment profile before the it qualifies.
  3. The Evaluate Based On field allows you to choose between two options: Total Returns or Consecutive Returns.
    1. If you set the rule to evaluate based on Total Returns, the rule will be set off by any failed payment that matches the qualifications within the history of all payments on the payment profile.
    2. If you set it to evaluate based on Consecutive Returns, the rule will only be set off by the selected return codes if they occur back-to-back.
Adding a Clojure Rule

If you look under the Status field, you will see one more option, called Rule, with word 'Empty' written in blue underneath it. If you click on 'Empty,' it will pull up the Formula editor, which allows you to add a Clojure rule.

For more info on Clojure, see our Rules Applied article.

Payment Profile Actions

Once you have finished selecting your rule requirements, you can then choose one of three actions to be applied to any payment profiles that meet the rule. The first option allows you to cancel any further AutoPays on the payment profile that failed. The second option allows you to inactivate the payment profile that failed, which would naturally also cancel any other scheduled payments. The final option is to take no action; you might choose to do this if you wanted only to change the loan settings in the next section rather than affect the the payment profile.

If you are setting up a multiple return to follow Small-Dollar Rule requirements, there are a few different ways you can use Multiple Returns to automate processes. We recommend speaking to your Success Specialist to figure out which methods work best with your business model.

Loan Settings

The last section covers the effects that will be applied to loans; it works similar to the way Rules Applied does. The fields available in this section allow you to change the settings of any loan associated with a payment profile that sets off the trigger. You can set custom fields for loans by clicking on the next tab over. If you need more information about the specific loan setting fields, check out our Loan Settings article.

Convenience Fee

You may have noticed the convenience fee option to the right of the loan setting fields. This option gives you the ability to add a convenience fee to any payment profiles that qualify. Take a look at Using Convenience Fees if you need more information on how they work.

Portfolios

At the bottom of the loan settings section, you have the option to automatically place loans selected by the rule into specific portfolios.


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