U.S. patent application number 10/168871 was filed with the patent office on 2003-11-06 for method and apparatus for mapping sources and uses of consumer funds.
Invention is credited to Compiano, Craig.
Application Number | 20030208445 10/168871 |
Document ID | / |
Family ID | 22633099 |
Filed Date | 2003-11-06 |
United States Patent
Application |
20030208445 |
Kind Code |
A1 |
Compiano, Craig |
November 6, 2003 |
Method and apparatus for mapping sources and uses of consumer
funds
Abstract
A bill-paying system includes a customer deposit account which
receives periodic payroll deposits of an individual or a couple. A
bill-paying service enrolls the individual or couple for a fee, and
is authorized to transfer money from the deposit account to the
accounts of various creditors. An originating depository financial
institution, such as a bank, actually handles all the transfers of
money, and such transfers are preferably all done electronically.
The automated clearing house (ACH) network supports such electronic
money transfers. The various bills and debts of the individual or
couple come due at times that are asynchronous to their income
structure. The bill-paying service is authorized to debit the
deposit account for more than the basic minimums due all the
creditors each month. Such excess is used to accelerate the
repayment of various loans and debts according to what particular
application at that time will have the greatest long-term
beneficial effect.
Inventors: |
Compiano, Craig; (Tampa,
FL) |
Correspondence
Address: |
TOWNSEND AND TOWNSEND AND CREW, LLP
TWO EMBARCADERO CENTER
EIGHTH FLOOR
SAN FRANCISCO
CA
94111-3834
US
|
Family ID: |
22633099 |
Appl. No.: |
10/168871 |
Filed: |
November 13, 2002 |
PCT Filed: |
December 13, 2000 |
PCT NO: |
PCT/US00/33750 |
Current U.S.
Class: |
705/40 ;
705/26.1 |
Current CPC
Class: |
G06Q 40/02 20130101;
G06Q 30/0601 20130101; G06Q 20/102 20130101; G06Q 30/04
20130101 |
Class at
Publication: |
705/40 ;
705/26 |
International
Class: |
G06F 017/60 |
Foreign Application Data
Date |
Code |
Application Number |
Dec 29, 1999 |
US |
60173691 |
Claims
1. A bill-paying system, comprising: a designated deposit account
or savings account (DDA) belonging to a debtor that is periodically
credited with a payroll income on a first regular schedule; a
custody account belonging to a service provider that is credited
with debits to the DDA by an originating depository financial
institution (ODFI); a creditor account belonging to a creditor of
said debtor that is credited on a periodic basis with a payment
debit to the custody account on a second regular schedule; and a
mechanism for determining an amount and date that said ODFI is
instructed to transfer funds between the DDA, custody account, and
creditor account; and at least one of: a trust finder mechanism; a
campaign product; a subscription transaction table; one or more
account policies, each account policy having one or more
disbursement schedules; one or more subscriptions to which a debtor
may subscribe.
2. The bill-paying system of claim 1, further comprising: an
ACH-file for providing funds transfer instructions to said ODFI
that is generated by the mechanism.
3. The bill-paying system of claim 1, wherein: the DDA receives
said payroll income over time that is in excess of a particular
debt owed by said debtor to said creditor; and the mechanism
further provides for a computation of an accelerated payment of
said debt and an inclusion of an excess payment to said creditor
account for providing a reduction in a total finance charge earned
by said creditor and costed to said debtor.
4. The bill-paying system of claim 1, further comprising: a service
fee account for receiving a service fee from the DDA in payment of
a contract between service provider and said debtor, wherein said
service provider operates the mechanism.
5. The bill-paying system of claim 4, further comprising: a
curtailment process for providing a computation of any funds that
may be available in the custody account after the creditor account
would be credited with said payment debit, and for providing a
transfer of said service fee to said service fee account.
6. A bill-paying system, comprising: a designated deposit account
and savings account (DDA) belonging to a debtor that is
periodically credited with a payroll income on a first regular
schedule; a custody account belonging to a service provider that is
credited with debits to the DDA by an originating depository
financial institution (ODFI); a plurality of creditor accounts each
belonging to a particular independent creditor of said debtor that
is credited on a periodic basis with a payment debit to the custody
account on a corresponding plurality of second regular schedules;
and a mechanism for determining an amount and date that said ODFI
is instructed to transfer funds between the DDA, custody account,
and each of the plurality of creditor account; and at least one of:
a trust finder mechanism; a campaign product; a subscription
transaction table; one or more account policies, each account
policy having one or more disbursement schedules; one or more
subscriptions to which a debtor may subscribe.
7. The bill-paying system of claim 6, further comprising: an
ACH-file for providing funds transfer instructions to said ODFI
that is generated by the mechanism on a cyclic basis.
8. The bill-paying system of claim 6, wherein: the DDA receives
said payroll income over time that is in excess of a particular
debt owed by said debtor to said creditor; and the mechanism
further provides for a computation of an accelerated payment of
said debt and an inclusion of an excess payment to said creditor
account for providing a reduction in a total finance charge earned
by said creditor and costed to said debtor.
9. The bill-paying system of claim 6, further comprising: a service
fee account for receiving a service fee from the DDA in payment of
a contract between service provider and said debtor, wherein said
service provider operates the mechanism.
10. The bill-paying system of claim 9, further comprising: a
curtailment process for providing a computation of any funds that
may be available in the custody account after each respective
creditor account would be credited with said payment debit, and for
providing a transfer of said service fee to said service fee
account.
11. A bill-paying system, comprising: a plurality of designated
deposit accounts (DDA's) each belonging to a corresponding debtor
that is periodically credited with a respective payroll income on a
plurality of first regular schedules; a custody account belonging
to a service provider that is credited with debits to the DDA by an
originating depository financial institution (ODFI); a plurality of
creditor accounts and/or savings accounts each belonging to a
particular independent creditor of each corresponding said debtor
that are credited on a periodic basis with a plurality of payment
debits to the custody account on a corresponding plurality of
second regular schedules; a mechanism for determining an amount and
date that said ODFI is instructed to transfer funds between each of
the plurality of DDA's, custody account, and each of the plurality
of creditor account; and at least one of: a trust finder mechanism;
a campaign product; a subscription transaction table; one or more
account policies, each account policy having one or more
disbursement schedules; one or more subscriptions to which a debtor
may subscribe.
12. The bill-paying system of claim 11, further comprising: an
ACH-file for providing funds transfer instructions to said ODFI
that is generated by the mechanism on a cyclic basis.
13. The bill-paying system of claim 11, wherein: each of the
plurality of DDA's receive said respective payroll income over time
that is in excess of a particular debt owed by a corresponding
debtor to a corresponding creditor; and the mechanism further
provides for a computation of an accelerated payment of said debt
and an inclusion of an excess payment to said creditor account for
providing a reduction in a total finance charge earned by said
creditor and costed to said debtor.
14. The bill-paying system of claim 11, further comprising: a
service fee account for receiving a service fee from the DDA in
payment of a contract between service provider and each said
debtor, wherein said service provider operates the mechanism.
15. The bill-paying system of claim 14, further comprising: a
curtailment process for providing a computation of any funds that
may be available in the custody account after each respective
creditor account would be credited with said payment debit, and for
providing a transfer of said service fee to said service fee
account.
16. A bill-paying service method, comprising the steps of:
enrolling a subscriber who is a debtor to a creditor and who has
authorized debits to be taken from a designated deposit account
(DDA) that is periodically credited with a payroll income on a
first regular schedule; periodically debiting said DDA through a
transmission of an ACH-file to an originating depository financial
institution (ODFI) and using any funds obtained to credit a custody
account; charging a service fee to said subscriber by debiting said
custody account; paying said creditor on behalf of said debtor in
an amount calculated for an accelerated repayment of a debt.
17. The bill-paying service method of claim 16, further comprising
the steps of: collecting an enrollment fee from said debtor for an
on-going service that includes the step of paying said
creditor.
18. The bill-paying service method of claim 16, wherein: the step
of periodically debiting said DDA coincides with said first regular
schedule; and the step of paying said creditor coincides with a
second regular schedule that differs from said first regular
schedule, and such a difference in said first and second regular
schedules provides for said accelerated repayment.
19. A bill-paying service method, comprising the steps of:
enrolling a subscriber who is a debtor to a creditor and who has
authorized debits to be taken from a designated deposit account or
savings account (DDA); collecting an enrollment fee from said
debtor for an on-going service of paying said creditor; depositing
a payroll income on a first regular schedule to said DDA that is
over time in excess of a minimum payment on a debt owed by said
debtor to said creditor; periodically debiting said DDA of a first
regular schedule and using any funds obtained to credit a custody
account; charging a service fee to said subscriber by debiting said
custody account; and paying said creditor on behalf of said debtor
in an amount calculated for an accelerated repayment of a debt on a
second regular schedule that differs from said first regular
schedule, and such a difference in said first and second regular
schedules provides for said accelerated repayment; and providing
and at least one of: a trust finder mechanism; a campaign product;
a subscription transaction table; one or more account policies,
each account policy having one or more disbursement schedules; one
or more subscriptions to which a debtor may subscribe.
20. The bill-paying service method of claim 19, wherein: the step
of periodically debiting, the step of charging a service fee, and
the step of paying said creditor each are implemented by a series
of transmissions of ACH-files to an originating depository
financial institution (ODFI) that has access to said DDA, service
fee account, and custody account, and that can forward funds to
said creditor.
Description
BACKGROUND OF THE INVENTION
[0001] 1. Technical Field
[0002] The present invention relates to plans for repaying mortgage
loans and other installment debts on accelerated schedules, and
more particularly to computer-implemented systems that organize,
forward, and report the application of many individual consumer
payments to their corresponding lenders and creditors with the
objective of saving money over a standard installment repayment
history.
[0003] 2. Description Of The Prior Art
[0004] In general, the unpaid principle of a mortgage or other type
of loan is what earns interest for a lender at the agreed rate.
Each monthly mortgage installment payment is usually applied first
against the interest earned, and then any balance goes towards
reducing the outstanding unpaid principle. The actual amount that
goes towards reducing the principle can be relatively small, e.g.,
10% of the payment. So it makes sense that if the borrower can make
the payments a little more frequent than once a month or include
more than the basic monthly payment, the principle will be reduced
faster and the interest earned will be correspondingly reduced. For
example, biweekly payments of half the monthly mortgage amount will
result in 26-biweekly payments being made in a year. So paying
biweekly results in one extra whole month's payment being
accumulated each year. That alone could reduce the term of a
30-year mortgage by a couple of years and several thousand dollars
being saved over the standard monthly payment schedule.
[0005] Commerce has always depended on the flow of value, i.e.,
companies and individuals paying what they owe and collecting what
they've earned. The conduit for the flow of value is the payments
system which has progressed from barter, to coins, to paper
currencies, to checks, and lately to electronic payments. In
decades past, cash and checks were the preferred payment
calculators for consumers and businesses. Today, businesses,
government agencies, and consumers feel the burden of paper
overload as more than sixty-three billion checks are processed
every year. Each check must be written or printed, signed and
mailed, and then retrieved, reconciled, and stored. With increasing
incidents of check fraud and a strong emphasis on privacy,
traditional check-issuers are demanding more secure and
confidential alternatives provided by electronic payments.
[0006] Direct deposit is the automatic deposit of all or part of
employees' pay, retirees' pension and annuities, and other business
deposits to consumers' checking and/or savings accounts. Instead of
printing checks, the employer or benefactor (originator) supplies a
computer file containing a record for each participating
employee/retiree/consumer to the businesses financial institution
(the ODFI). The ODFI assures correct formatting and transmits the
file to the automatic clearing house (ACH) operator for delivery to
the employees'/retirees'/consumers' (receivers') depository
accounts at their financial institutions (RDFI's).
[0007] In the case of direct deposit of payroll, the employer
provides the employee on payday information regarding gross pay,
payroll deductions, tax withholding, net pay, and other appropriate
details. Similarly, businesses supply other appropriate data to
pensioners, annuitants, and consumers regarding the credits to
their depository accounts. Direct payment and home banking/bill
payment services save consumers time and money by eliminating
checks, check handling, and postage. With direct payment, consumers
preauthorize electronic debits to their depository accounts for
types of recurring bill payments such as insurance premiums,
utility bills, all types of loan payments, mortgages, club
memberships, subscriptions, and charitable contributions. To
initiate direct payment, consumers must provide a written
authorization to their participating billing companies, clubs,
charities, etc. Authorizations may be cancelled at the discretion
of the consumer according to the procedures outlined in the
authorization. Cancellation of direct payment has no effect on the
consumers' financial obligation to the billing company. With
appropriate authorization, the billing company originates a
computer file containing payment information. The company's
financial institution transmits the debit through the ACH-network
to the consumer's depository account.
[0008] When consumers choose to participate in conventional home
banking/bill payment services, they can initiate their bill
payments by telephone, computer, or other calculatorss. The
consumer's service provider initiates ACH debits from the
consumer's bank account and ACH credits to the consumers billing
account for the authorized payment. Home banking/bill payment
services are offered by various financial institutions and other
private service providers throughout the United States.
[0009] Direct payment and home banking services provide benefits to
both companies and consumers. Companies reduce expenses associated
with check processing and improve cash flows by reducing
delinquencies and late billing procedures. Consumers reduce check
and postage costs and save the time of manually preparing and
mailing checks. In addition, consumers can reduce late fees, forget
about payment deadlines, and make their account reconciliation
process simpler. Consumers never relinquish control of their
accounts. Direct payments and home banking/bill payment services
may be terminated or modified at any time according to procedures
outlined in the authorization agreement.
[0010] Electronic commerce can incorporate all aspects of the
ordering, inventory, and payments processes of businesses.
Companies may use electronic data interchange (EDI) to place
orders; to update, control, and reorder inventories; to transmit
billing statements; and to collect or make payments. The
ACH-network is an efficient electronic payment alternative to
checks and wire transfers to complement electronic commerce.
Electronic business payments may be ACH debits or ACH credits
depending on the needs of and the agreements among trading
partners. The ACH-network provides an electronic payments
calculators for financial EDI, Internet payments, corporate trading
partner exchanges, corporate cash management, and other
business-to-business transactions such as transmission of insurance
and healthcare information and payments.
[0011] Financial EDI is the electronic movement of payments and
payment-related information in standard formats through the banking
system. Businesses of all sizes; state, local, and federal
government agencies, and financial institutions are incorporating
financial EDI into their payments practices to minimize the flow of
paper, to reduce administrative costs, and to improve efficiencies.
Businesses use the ACH-network to pay or to collect from corporate
trading partners. The transaction sets of the ACH-network provide
varying levels of payment transfers from the simplest to the most
complex, including invoice numbers, discount, adjustment, and other
remittance information.
[0012] In the 1990s, the Internet is becoming an increasingly
important tool for business-to-business communications. Companies
use the Internet to place orders, update inventories, and authorize
payments. The ACH-network provides an efficient payments calculator
to settle transactions initiated on the Internet.
[0013] Good corporate cash management techniques allow businesses
to accelerate cash in-flows, manage account balances to reduce
borrowing needs, improve earnings potential of operating capital,
and precisely control cash disbursements. The ACH-network allows
companies to move money between branches or offices quickly and
reliably based on operating needs. Companies with geographically
dispersed offices can use the ACH-network to draw funds into
centralized accounts from widely-scattered financial institutions.
Similarly, funds can be disbursed to remote operations as needed.
The ACH-network is an efficient calculator to shift balances to and
from centralized concentration accounts to effectively administer
corporate operations.
SUMMARY OF THE INVENTION
[0014] The present invention includes a bill-paying system with a
customer deposit account that receives periodic payroll deposits of
an individual or a couple ("Subscriber"). A bill-paying service
enrolls the individual or couple for a fee, and is authorized to
transfer money from the deposit account to the accounts of various
creditors. An originating depository financial institution, such as
a bank, actually handles all the transfers of money, and such
transfers are preferably all done electronically. The automated
clearing house (ACH) network supports such electronic money
transfers. The various bills and debts of the individual or couple
come due at times that are asynchronous to their income structure.
The bill-paying service is authorized to debit the deposit account
for more than the basic minimums due all the creditors each month.
Such excess is used to accelerate the repayment of various loans
and debts according to what particular application at that time
will have the greatest long-term beneficial effect.
[0015] Among the features of the preferred embodiment of the
invention are:
[0016] 1. Each subscriber may be associated with multiple
transactions involving the movement of money;
[0017] 2. A single subscription transaction table is provided which
contains all data for moving money;
[0018] 3. A subscriber can have one physical loan with multiple
recurring payment records, i.e. there is a logical grouping of
disbursements for a given instrument;
[0019] 4. A trust finder function provides a join across multiple
tables for trust arrangement to map money movement; and
[0020] 5. A campaign product is provided for managing money based
upon product type and destination of funds.
BRIEF DESCRIPTION OF THE DRAWINGS
[0021] FIG. 1 is functional block diagram of a loan servicing
system;
[0022] FIG. 2 is a functional block diagram of a money management
system;
[0023] FIG. 3 is a flowchart diagram of a service provider and
sponsor lockbox process embodiment of the present invention;
[0024] FIG. 4 is a block diagram of a debt repayment system;
[0025] FIG. 5 is a block diagram of a debt repayment system
according to the invention;
[0026] FIG. 6 is a flowchart diagram of a create ACH-file process
embodiment of the present invention;
[0027] FIG. 7 is a flowchart diagram of a second part of the create
ACH-file process of FIG. 6;
[0028] FIG. 8 is a flowchart diagram of a generate
receipts/disbursements process embodiment of the present
invention;
[0029] FIG. 9 is a flowchart diagram of a second part of the
generate receipts/disbursements process of FIG. 8;
[0030] FIG. 10 is a flowchart diagram of a third part of the
generate receipts/disbursements process of FIG. 8; and
[0031] FIG. 11 is a flowchart diagram of a fourth part of the
generate receipts/disbursements process of FIG. 8.
DETAILED DESCRIPTION OF THE INVENTION
[0032] FIG. 1 represents a loan servicing system, and is referred
to herein by the general reference numeral 100. A customer checking
account 102 sources a transfer of funds 103 to a bank 104. A credit
105 is made to a custody account 106 that acts like a buffer. Money
is stockpiled in the custody account 106 from the customer checking
account 102 in amounts and times that are dependent on a customers
ability to earn income. In effect, this is a front-end
money-gathering subsystem. A series of partial payments are stored
up over time.
[0033] A debit 107 is periodically made to issue a credit 108 to a
payment clearing account 110. An advise 111 is returned to a
servicing platform 112. So a back-end mortgage servicing or legacy
subsystem is provided for posting payments, segregating and
remitting funds, calculating interest, mortgage servicing, car loan
type processing, etc. In an early development prototype system, the
servicing platform 112 was provided by Computer Power, Inc., now a
part of Alcatel. A communications link 113 allows a service
provider 114 to direct the back-end mortgage servicing or legacy
subsystem. Another communications channel 115 allows the service
provider 114 to direct the front-end money-gathering subsystem. The
servicing platform 112 was initially provided with mortgage
servicing software, but it was discovered that this could be
greatly expanded to service more than just the mortgages of a
consumer. Many or all of the installment accounts could be
simultaneously managed for many hundreds of customers. It is also
possible for billers to present bills for the customer to pay that
are delivered to the service provider 114, e.g., bills that require
payment within ten days The custody account 106 would then be used
by the servicing platform 112 to pay such "pay-on-demand" bills
when previously authorized.
[0034] FIG. 2 represents a money management system that is referred
to herein by the general reference numeral 200. A source designated
deposit account (DDA) 202 belongs to a subscriber 204 and has money
periodically deposited to it. For example, DDA 202 may be the joint
account of a husband and wife where the husband gets paid by his
employer every Friday and the wife by her employer every other
Tuesday. Between them, the couple (subscriber 204) have various
installment loans and credit card debts that need to be paid on or
before certain days of the month and with minimum payments for
each. For example, a monthly payment is due to a sponsor mortgage
lender 206. An originating depository financial institution (ODFI)
208, e.g., a bank, is authorized at instructed times and amounts to
debit the DDA 202. The couple holding the DDA 202 have authorized a
payment service provider 210 to instruct that funds be withdrawn
from this account to pay the various creditors on time and with at
least the required minimum payments. A pre-arranged payment and
deposit (PPD) in ACH-format is used by the payment service provider
210. The peculiar income structure of the subscriber 204 is
preferably used to advantage by the payment service provider 210 to
make periodic payments on the installment loans and credit card
debts. For such service, the subscriber 204 will pay the payment
service provider 210 a fee, e.g., per use, per moth, etc.
[0035] The subscriber 204 can benefit by paying more than the
minimums due on each account and by paying a monthly installment
account in part on a weekly or biweekly basis. They will benefit by
a more rapid decrease in the unpaid principle and therefore save on
the interest charges that accrue on that unpaid principle each
month. At the same time, it is imperative that there always be
enough money on hand to pay each bill by its due date. So any
acceleration of payments cannot leave the system 200 short of funds
to pay any bill that normally comes due later in the month. The
payment service provider 210 must therefore be instructed which
creditors are to be paid, the terms of the loans involved, the
income structure of the subscriber 204, and the total amounts
authorized to be withdrawn at various times of the week, month, and
year from DDA 202.
[0036] The movement of money in system 200 preferably uses the
automated clearing house (ACH) network in the United States which
is a central clearing facility that provides distribution and
settlement of electronic financial transactions. ACH operators
clear debits and credits electronically, rather than through the
physical movement of checks. There are four ACH operators in the
United States, the Federal Reserve System, Visanet ACH, new York
ACH, and American ACH. The Federal Reserve System alone clears
about eighty percent of all ACH transactions. Such ACH-network was
formed in the early 1970's to provide an efficient alternative
using electronic and telecommunications technology to replace paper
check processing. The ACH system uses batch-processing, store and
forward operations. ACH payments are not processed individually.
Originating depository financial institutions (ODFI's) submit ACH
payment files to the ACH operators. The ACH operators accumulate
these files, sort them by destination, and transmit them to
receiving depository financial institutions (RDFI's) for
application to customers' accounts at predetermined times
throughout the business day. The ACH system provides significant
economies of scale compared to individual wire transfers, and is
faster and more accurate than paper-check processing.
[0037] The ACH-network is a nationwide wholesale electronic payment
and collection system now used by hundreds of thousands businesses
and financial institutions.
[0038] Technological advances implemented by the ACH operators
allow transactions to arrive at their destinations in a matter of
hours. Entries are settled quickly, most often within one business
day of origination. The ACH-network delivers electronic payments
quickly, safely, reliably, and conveniently to financial
institutions for their customers.
[0039] The ACH-network is not used only for consumer transactions
such as direct deposit and direct payment, nor only for
business-to-business transactions known as financial EDI. The
ACH-network is also the settlement calculator for home-banking
payments, credit card clearings, electronic benefit transfers
(EBT), point-of-sale (POS) and Internet purchases, electronic check
transmissions, and even automated teller machine (ATM)
transactions. The ACH system provides the basic infrastructure for
a wide variety of electronic payment applications.
[0040] The national automated clearing house association (NACHA) is
a nonprofit banking trade association that promulgates the rules
and operating guidelines for electronic payments, such as direct
deposit, direct payment (preauthorized debits), financial EDI,
electronic benefits transfers, third-party bill payments,
electronic checks, and Internet payments. NACHA represents
thirty-five regional ACH associations which have a total of more
than 13,000 financial institution members. NACHA provides
educational payments conferences, as well as marketing collateral
and technical publications. NACHA can be accessed through the
Internet at www.nacha.org.
[0041] An "ACH originator" is a company or other business entity
that creates entries for introduction into the ACH-network. For
example, an employer produces credit entries to pay employees who
have authorized direct deposit. A utility or other billing company
produces debit entries from customers' financial institution
accounts who have authorized direct payment for products and
services. A business produces financial EDI transactions to pay or
collect trading partner obligations. ACH receivers are consumers,
customers, employees, and other businesses who have authorized
electronic payments by direct deposit, direct payment, or financial
EDI to be applied against their depository accounts. An originating
depository financial institution (ODFI) typically initiates and
warrants electronic payments through the ACH-network on behalf of
its customers. A receiving depository financial institution (RDFI)
provides depository account services to consumers, employees, and
businesses and accepts electronic payments to those accounts. The
ACH-network transfers payments and related data through computer
and high-speed communications technology, e.g., the Internet.
ACH-network services can be divided into five broad categories, (1)
direct deposit services, (2) direct payment and home banking
services, (3) electronic commerce, (4) electronic benefits
transfers, and (5) electronic checking.
[0042] Returning now to FIG. 2, the system 200 further includes a
manual receipt 212 that can be accepted in addition to or instead
of electronic transfer funds from DDA 202. Either way, a settlement
account 214 is credited with the money. A services fee account 216
is credited by a debit to the settlement account 214 and
transferred to an operating account 218 belonging to the payment
service provider 210. An enrollment fee account 220 is used to
receive up-front subscription fees that may be required for use of
the payment service system 200 from the subscriber 204. A
commission fees account 222 is used to receive miscellaneous fees
that may be earned from the sponsor 206, the ODFI 208, or others.
All such enrollment fees, service fees, and commissions contribute
to the operating account of the service provider.
[0043] A number of earmarked custodial accounts 224 are credited
with money debited from the settlement account 214 in the name of
the client sponsor 206, e.g., at the request of the service
provider 210 using ACH-format PPD. Such money is collected to pay
an FNMA, GNMA, FHA, etc., mortgage loan, car loan, credit card
debt, or other. Thus system 200 is based on an asynchronous
debiting based on the subscriber's payroll cycles and crediting
based on the due dates of various obligations. Prior art systems
are simply driven to debit and credit solely on the due dates of
the obligations.
[0044] Funds are then periodically withdrawn from the custodial
accounts 224, in one case, to a check disbursement settlement
account 226 so that a series of paper checks 228 can be issued. In
another case, funds are periodically withdrawn from the custodial
accounts 224 to an EFT disbursement settlement account 230. The
service provider 210 instigates both these kinds of transfers with
PPD instructions in ACH-format. After all the required payments are
made, a curtailment can be calculated. Any surplus funds in the
custodial accounts 224 will trigger a collection of unpaid service
fees (USF). This results in a transfer of USF from custodial
accounts 224 to the service fees account 216 by PPD in ACH-format.
A corporate trade exchange (CTX) ACH-format is used to transfer
funds from the EFT disbursement settlement account 230 to a sponsor
payment clearing account 232. This is handled by an EDI process
initiated by the service provider 210. Such CTX transfer can
include BPR and ADX segments, for example. Payments are then
ultimately transferred to a sponsor servicing system 234 from the
sponsor payment clearing account 232. A standard lockbox layout
format is used that is triggered by the receipt of the CTX
transactions.
[0045] A typical transaction flow between the sponsor 206 and the
service provider 210 includes a solicitation tape from the sponsor,
new additions from the service provider, refresh records from the
sponsor, account status changes from the service provider, and
account status changes from the sponsor. Sponsor-generated
transactions can also include investor sales/transfers, service
releases, payoffs/paid-in-fulls, foreclosures, bankruptcies,
payment changes, and delinquent payment information. Conversely,
service-provider generated transactions can also include updated
first payment dates, suspended accounts, terminated accounts,
custodial account balances, next and last withdrawal information,
reactivated accounts, and letter-writer queue records.
[0046] FIG. 3 represents a service provider and sponsor lockbox
process 300. A step 302 begins with ACH file processing, e.g., by
the Federal Reserve. This fills an ACH-file 304 in CTX format with
addendums. A step 306 represents a bank's ACH processing, e.g.,
PepPlus. "Dollars" are then transferred to an account posting file
308 and contribute to a daily cash reconciliation report 310. A
paper reconciliation status 312 is output. "Data" is transferred
from the step 306 to an EDI file 314 from the CTX addenda. An
in-house EDI conversion step 316, e.g., Sterling, is used to
provide a control report 318 and a flat file 320. A flat-file to
lockbox format conversion step 322 produces a lockbox file 324.
Such is transmitted in a step 326 to a loan-data file 328. A
serving system step 330 produces a loan-master file 332 and a
general ledger book entry file 334. The daily cash reconciliation
step 310 combines information from both the account posting file
308 and the general ledger file 334.
[0047] In general, embodiments of the present invention comprise a
bill-paying system with a customer deposit account that receives
periodic payroll deposits of an individual or a couple. A
bill-paying service enrolls the individual or couple for a fee, and
is authorized to transfer money from the deposit account to the
accounts of various creditors. An originating depository financial
institution, such as a bank, actually handles all the transfers of
money, and such transfers are preferably all done electronically.
The ACH-network supports such electronic money transfers. The
various bills and debts of the individual or couple come due at
times that are asynchronous to their income structure. The
bill-paying service is authorized to debit the deposit account for
more than the basic minimums due all the creditors each month. Such
excess is used to accelerate the repayment of various loans and
debts according to what particular application at that time will
have the greatest long-term beneficial effect.
[0048] The ACH-network is based on a series of agreements-between
the company and its financial institutions, between trading
partners, between the employer and its employees/retirees, between
the billing company and its customers, among financial
institutions, and between the financial institution and its
customers. The basis for these agreements is the ACH rules: a
complete guide to the rules ®ulations governing the
ACH-network. These rules and operating guidelines are developed and
promulgated by the national automated clearing house association
(NACHA). Rules and conventions for specific applications such as
cross-border payments, financial EDI, electronic benefits transfers
(EBT), electronic check, and consumer-initiated bill payments are
developed by NACHA's councils: the cross-border council, the
bankers EDI council, the EBT council, the electronic check council,
the bill payment council, and the Internet council.
[0049] In order to participate in electronic payments, businesses
must enter into agreements with the originating financial
institutions of their choice and with the receivers of the
transactions, e.g., employees, retirees, consumers, or other
businesses. These agreements define the rights and responsibilities
of each party to the transaction. The agreement between the
business and the financial institution also establishes the method
and procedures by which the payments are processed and settled.
[0050] The authorization by the receiver generally includes
provision of a financial institution name and routing number and
the appropriate account number for the transactions. According to a
preapproved schedule, the business submits computer files usually
in the ACH standard format to its ODFI for processing. ACH software
for personal computers, local area networks, and mainframe
computers is readily available in the marketplace. Even the
smallest companies can take advantage of the efficiencies of the
ACH payments system. In addition, many service bureaus and
financial institutions provide a variety of conversion and computer
services to assist businesses. This book-electronic payments review
and buyers' guide-contains listings and contact for the providers
of ACH products and services.
[0051] There are currently four ACH payment formats available to
meet company and business needs for timely disbursements and
collections. These are cash concentration or disbursement (CCD),
cash concentration or disbursement plus addenda (CCD+), corporate
trade exchange (CTX), and the soon-to-be obsolete corporate trade
payments (CTP). Addenda records allow the CCD+, CTP and CTX formats
to both electronically transmit payments and payment-related
information in standard formats between financial institutions.
[0052] The CCD payment format is the only corporate format that is
not accompanied by addenda records. However, a reference number is
placed in the entry detail record so that the payment and
remittance advice can be reconciled by the seller (receiver).
[0053] The CCD+ format is the same as the CCD format with the
addition of one addenda record. Part of the addenda record contains
a payment-related information field in which data segments as
defined by ASCII x12 or NACHA-endorsed banking conventions are
used. This addenda record allows the transmission of limited
remittance information related to the payment.
[0054] The CTX format allows a company or business to
electronically transmit one payment to cover multiple invoices and
associated remittance information. The CTX format allows up to
9,999 addenda records. For CTX entries, the addenda are linked
together with each succeeding addenda record carrying the next 80
characters of the message. The complete ASCII x12 820 or 835
transaction set is "enveloped" within the CTX addenda records.
[0055] FIG. 4 is a block diagram of a debt repayment system. In
such system a sponsor 10 may have a plurality of marketing
contracts 12 which are under supervision of a trust arrangement 13.
The trust arrangement is used to move money as set forth on FIG. 2
(200). In FIG. 4, a W is used to represent the four legs of money
movement shown in FIG. 2. In contrast to the prior art arrangement,
a key element of the invention is that each leg of the W moves
money independently of each other leg. Thus, the invention can
route money along each leg of the W as desired. Unlike the prior
art, the invention therefore provides the asynchronous movement of
money pursuant to a trust arrangement.
[0056] Continuing with the conversation of FIG. 4, a subscription
11 is established for a subscriber 15. The subscription may have
one or more receipt schedules 16. The subscription also includes
one or more disbursement schedules 20 and one or more account
policies 20. The disbursement schedules and account policies bear a
one to one relationship. That is, an account policy may only have a
single disbursement schedule and a disbursement schedule may only
be associated with a single account policy. The subscription may
also include a plurality of subscription transactions 18 as
established through queue 17. Each subscription transaction may
include a corresponding bank account transaction 19.
[0057] FIG. 5 is a block diagram of a debt repayment system
according to the invention. It should be noted at the outset that
key architectural improvements are provided over the system shown
on FIG. 4. Among the features of the preferred embodiment of the
invention are:
[0058] 1. Each subscriber may be associated with multiple
transactions involving the movement of money;
[0059] 2. A single subscription transaction table is provided which
contains all data for moving money;
[0060] 3. A subscriber can have one physical loan with multiple
recurring payment records, i.e. there is a logical grouping of
disbursements for a given instrument;
[0061] 4. A trust finder function provides a join across multiple
tables for trust arrangements to map money movements; and
[0062] 5. A campaign product is provided for managing money based
upon product type and destination of funds.
[0063] The foregoing features of the invention provide flexibility
to allow movement of money independently along each leg of the
money path, i.e. the "W" of FIG. 2. However, unlike the prior art,
the foregoing advantages are provided by the invention. Limitations
of the prior art reside in the fact that a customer has a single
subscription with a single balance to a single custody account.
Thus in the prior art, one money movement pattern per customer. The
invention, however, provides multiple money movement patterns per
customer. Thus, multiple products may be provided with different
characteristics, i.e. some may pay interest while others may not
pay interest. Thus, a single customer may be provided with a
mortgage acceleration product that does pay interest and a credit
card restructure product that does not pay interest.
[0064] As shown on. FIG. 5, a sponsor 10 may have many
subscriptions 30. Each subscription can include a plurality of
receipt schedules 31. Each subscription may also include a
plurality of subscription transactions 34. Additionally, with
regard to a subscription 30 a plurality of subscribers 35 may be
associated with a subscription. In contrast to the prior art, in
which a subscription transactions includes a single bank account
transaction, the invention provides a single subscription
transaction table which contains all data for moving money. Such
arrangement is efficient and reliable in that all information is
contained in one location in contrast to the many locations
required by the prior art.
[0065] As further mentioned above, a one-to-many subscriber
arrangement is provided by the invention. Thus, all money
transactions for a subscriber are maintained in a single file.
[0066] The invention also provides a plurality of account policies
36 for a subscription, each of which may have a plurality of
disbursement schedules 37. This aspect of the invention provides a
logical grouping of disbursements for a given instrument which
stores and organizes data more efficiently.
[0067] The invention also provides a trust finder function 38
which, in the preferred embodiment of the invention, includes
tables for a sponsor 39, product 40, payee 41, and investor 42. The
trust finder provides a join across the four tables which defines
the trust arrangement in such a way to map money movements. Thus,
additional attributes may be provided to define the money movement
process. Such definition is crested by the join across the four
tables.
[0068] The invention also provides a campaign product feature by
which a campaign 33 may be offered to a plurality of subscriptions.
Each campaign, in turn, may comprise a plurality of products 32.
This arrangement allows the management of money based on product
type where money is being remitted. Thus, a product may be sold
among multiple campaigns.
[0069] FIG. 6 represents a create ACH-file process 400 that runs
through the subscription transaction records and the trust
arrangement prenote queue records that require NACHA processing.
Process 400 creates an ASCII file of bank transaction instructions.
An ASCII file is generated for each ODFI bank and appropriate
sponsor combination included in the system. Upon successful
creation of the each ASCII file, the status of the associated
subscription transaction or trust arrangement prenote queue
changes. The process displays a message box in a step 401 to ask if
the user wishes to create an ACH file. If the user chooses to
cancel the process, the process is aborted. Otherwise, the process
400 creates a task record in a step 402. In a step 403, the process
selects all subscription transaction and trust arrangement prenote
queue records that require NACHA processing. It sorts the
transactions by sponsor grouping requirements, ODFI transit routing
number, transaction date, queue type, ODFI account number, RCVG
transit routing number, RCVG account number and NACHA transaction
code. An end-of-file test 404 checks to see if all the transactions
have been processed. If so, a step 405 updates the task record and
logs any errors. A step 406 retrieves a NACHA File ID and the bank
information. A step 407 sorts out each group of transactions that
have the same sponsor grouping requirement and ODFI transit routing
number. A NACHA File header record is created in a step 408. A test
409 checks to see if this is the end of a group or and end-of-file.
If not, processing continues on to process 500 (FIG. 5) through a
connector 410. A step 411 creates a NACHA file control record. A
test 412 checks if the total number of records in an ASCII file is
divisible by ten. If not, a step 413 creates filler records to
bring the count of records up to a multiple of ten. A test 414
looks to see if any errors have occurred. If not, a step 415
updates an addenda count in a NACHA ASCII file 416. A step 417
closes the NACHA ASCII file 416 and then commits the transaction
updates The step 405 updates a task file 418 and task-error file
419. An exit 420 ends the process.
[0070] FIG. 7 represents a process 500. A connector 501 continues
from connector 410 (FIG. 4). In a step 502, for each group of
transactions that have the same transaction date, the process
creates a NACHA batch header record. A test 504 checks to see if
this is the end of a group. In a step 505, for each group of
transactions that have the same ODFI account number a test 506
checks for the end of the group. If yes, a step 507 builds an
offsetting record and returns to test 504. If test 506 is no, then
a group of transactions that have the same RCVG bank account, NACHA
trans code and queue type are assembled. If this is the end of such
a group, then a test 509 returns control back to test 506.
Otherwise, a step 510 is used to determine the NACHA trans code. If
the answer in test .504 was yes, the a step 511 creates an
offsetting entry record and batch control record. Control is
returned through a connector 512 back to process 400.
[0071] A test 513 checks to see if the transaction's queue type is
"EFT DSB." If so, a step 514 divides the set of transactions having
the same RCVG transit routing number, RCVG account number and NACHA
transaction code into groups of five hundred transactions or less.
A test 515 checks if all such groups of five hundred or less
transactions have been processed. A step 516 and 517 creates a
NACHA detail record in CTX format. A test 518 checks if all the
transactions in a group have been processed. Each transaction
included in the NACHA detail record is used in a step 519 to create
a set of NACHA CTX addenda records formatted by the payee's EDI
element records. If the answer in test 513 is no, then a step 520
creates a NACHA detail record in PPL format. A step 521 updates the
status of each subscription transaction or trust arrangement
prenote in a queue 522 to "cleared" or "pending". (Pending status
only applies to prenote and receipt transactions.)
[0072] FIG. 8 represents a generate receipts/disbursements process
600 that runs through active subscriptions, and generates
subscription transactions for each active receipt schedule or
disbursement schedule that is scheduled to cycle. A step 601
displays a message box to ask if the user wishes to generate
receipts and disbursements. If the user instead chooses to cancel
the process, the process is aborted. A step 602 creates a task
record in a task file 603. Each active subscription that is
associated with either an active disbursement schedule or an active
receipt schedule that has a next cycle initiate date that is less
than or equal to the current system date is fetched by a step 604
from a subscription file 605. The subscriptions are sorted by the
trust arrangement. A test 606 looks for an end-of-record. If not, a
step 607 retrieves records associated with the subscription from a
subscriber file 608, a marketing contract file 609, an
administrator file 610, and a trust arrangement file 611. A test
612 validates the records associated with the subscription to see
if there is an authorized marketing contract that it is active
prior to or on the current system time. This is done by looking in
an authorized marketing contract file 613. A test 614 verifies that
the particular bank account, or receipt account specified by the
subscriber trust arrangement, is active. A test 615 checks to see
if the holding account specified by the subscriber trust
arrangement is active and the bank account status is cleared. A
bank-account-status file 616 and a bank-account file 617 are
consulted. A test 618 checks to see if the service fee account
specified by the subscriber trust arrangement is active and the
bank account status is cleared. A test 619 checks to see if the EFT
disbursement account specified by the subscriber trust arrangement
is active.
[0073] When all of the records associated with a subscription pass
validation, e.g., tests 614, 615, 618, and 619, control passes to
process 700 through a connector 620. If the end-of-file is
encountered in test 606, a step 621 updates the task file 603.
Process 600 then ends at an exit 622. If any of the records
associated with a subscription fail validation, e.g., tests 614,
615, 618, and 619, control passes to step 623 that logs the error
in a task-error file 624.
[0074] FIG. 9 represents a stage 2 process 700. A connector 701
receives control from connector 620 in process 600. Each receipt
schedule that needs processing passes through a step 702. A test
703 looks for an end-of-file marker in the file. If one is found,
control passes through a connector 704 to a process 800. A test 705
sees if the schedules' associated bank account status 706, the
subscriber account specified by the receipt schedule, has passed
the prenote process and the schedule also has a receipt method code
of EFT. A step 707 creates the transaction records that are
associated with the retrieval of the receipt funds from the
subscriber's account to the receipt account. A step 708 creates the
transaction records that are associated with the movement of the
receipt base amount from the receipt account to the holding
account. A step 709 creates the transaction records that are
associated with the movement of the receipt service fee amount from
the holding account to the service fee account. A step 710 cycles
the receipt schedule. A step 711 logs an SX change record for each
active disbursement schedule associated with the subscription that
has a payee requiring notification. The log is maintained in a
disbursement schedule file 712. A step 713 updates the
subscriptions current balance with the receipt amount and changes
the subscription transaction next number in a subscription file
714. A test 715 checks if the process is working on its first
receipt schedule for this subscription. If yes, then a step 716
allocates a curtailment to the subscriber disbursement schedules.
If the schedules associated bank account status (subscriber) has
not passed the prenote process, or the schedule does not have a
receipt method code of EFT, then the process skips the receipt
schedule and processes the next schedule.
[0075] FIG. 10 represents a process 800 that is entered through a
connector 801 from connector 704 in process 700. Each disbursement
schedule that needs to be processed passes through a step 802. A
test 803 looks for an end-of-file marker in the file. If one is
found, control passes through a connector 804 to the process 600.
Otherwise, a subroutine call 805 is made to process 900. A return
is made to a test 806 which looks to see if the disbursement is
delayed in process 900. If not, a test 807 checks if the payment
transaction method is to be electronic funds transfer (EFT) or by
check (CHK). If CHK, then a step 808 creates the transaction
records that are associated with the movement of the disbursement
amount from the holding account to the check disbursement account.
A step 809 creates the transaction records that are associated with
the creation of the corresponding check. If the payment transaction
method is by electronic funds transfer, a step 810 creates the
transaction records that are related with the movement of the
disbursement amount from the holding account to the EFT
disbursement account. A step 811 creates the transaction records
that are associated with the payment of the disbursement amount to
the payee. A step 812 cycles the disbursement schedule. A step 813
produces a SX change record. A step 814 produces a series of
appropriate service events in a file 815. A step 816 updates the
subscriber current balance, funds disbursed, and "next" numbers.
Such updates are sent to a disbursement-schedule file 817 and a
subscription file 818.
[0076] FIG. 11 represents a process 900 that is entered through a
connector 901. A test 902 checks to see if the payee is authorized
according to a payee list in a file 903. If so, a test 904 checks
to see if the scheduled funds are disbursed, will the subscriber
available current balance remain above zero? (E.g., available
current
balance=SUBN.CURRENT_BALANCE_AMT-(SUBN.PENDING_RCPT+SUBN.HOLD_AMT))
A subscription file 905 provides data for the calculation. If yes,
a test 906 looks to see if this is the last cycle the disbursement
schedule is being processed. If yes, a test 907 checks if there any
pending transactions. A pending-return file 908, a pending-refund
file 909, and a parameter-detail file 910 provide data for test
907. If the answer to test 907 is no, a test 911 checks if the
refund system is active. If not, a step 912 estimates all
unallocated interest and updates the subscription file to include
new interest and decreases the subscriber minimum allowable balance
to zero.
[0077] Each unpaid service fee passes through a step 913. A test
914 looks for an end-of-file. If not the EOF, a test 915 sees if
there are any unpaid service fees associated with the subscription
that have an amount that is less than or equal to the disbursement
schedule curtailment amount and the process determines that it can
pay the fee. If unpaid service fees can now be paid, a step 916
creates transaction records to withdrawn such service fees from the
subscriber holding account. A step 917 creates the transaction
records that are associated with the deposit of the service fee
amount into the service fee account. A step 918 moves the unpaid
service fee record in a file 919 to the paid service fee table and
changes the status to "paid" in a file 920. The service fee amount
is removed from the subscriber current balance, pending curtailment
amount, and pending use amount.
[0078] If the EOF is reached in test 914, a test 921 checks to see
if the curtailment can be disbursed. If so, a step 922 removes the
service fee amount from the disbursement schedule's pending
curtailment amount. In a step 923, if there are any unpaid service
fees associated with the subscription that have an amount that is
less than or equal to the disbursement schedule curtailment amount,
and the process determines that the only thing stopping the payment
of the unpaid service fee is the pending receipts, the disbursement
is delayed until the next cycle. A step 924 logs any errors in a
file 925.
[0079] Embodiments of the present invention further include an
allocate curtailment program, a calculate-next-cycle dates program,
a create-transaction program, an estimate-interest program, a
get-schedule-status program, and a log-SX-change program. A
next-cycle-dates calculation tests to see if the disbursement
schedule is being delayed one business day. If so, the
disbursement_schedule.next_ini- tiate_date is incremented by one
business day and is verified by a calendar table. The
disbursement_schedule.next_transaction_date is incremented by one
business day. And if the disbursement_schedule.next_id- eal_date is
older than five days, the process logs an error into a task-error
table. Otherwise the process cycles the receipt or disbursement
schedule according to the schedule's cycle type.
[0080] For the last cycle calculation, if all of the disbursement
schedules associated with the subscription are closed except for
the disbursement schedule that is currently being processed, and
the disbursement schedule that is currently being processed will
not cycle again prior to its end date, the projected disbursement
schedule's next initiate date, then the subscription is on its last
cycle.
[0081] For the fee payment calculation, if the unpaid service fee
amount is less than or equal to the disbursement schedule's pending
curtailment amount, the unpaid service fee can be paid if the
payment of the unpaid service fee would not decrease the subscriber
current balance below the subscriber minimum balance allowed, while
also subtracting the subscriber pending receipt amount. Or if the
payment of the unpaid service fee would not decrease the subscriber
current balance below the subscriber minimum balance allowed, but
requires the use of the subscriber pending receipt amount, the
unpaid service fee can be paid, if the disbursement schedule was
delayed until the pending receipt amount cleared. Otherwise, the
unpaid service fee cannot be paid.
[0082] For the curtailment payment calculation, if the disbursement
schedule is capable of curtailing money and its curtailment amount
is greater than its minimum, the curtailment amount can be included
in the disbursement if the payment of the curtailment amount does
not decrease the subscriber current balance below the subscriber
minimum balance allowed, while also subtracting the subscriber
pending receipt amount. Or if the payment of the curtailment amount
does not decrease the subscriber current balance below the
subscriber minimum balance allowed, but requires the use of the
subscriber pending receipt amount, the curtailment amount could be
included in the disbursement, if the disbursement schedule was
delayed until the pending receipt amount cleared. Otherwise, the
curtailment amount cannot be disbursed.
[0083] For the create service event, if the sponsor associated with
the subscription requires the creation of an initial enrollment
service event at the time of the first disbursement and the current
disbursement schedule is the subscriber primary disbursement
schedule and it is on its first cycle, and if the subscription has
enrollment fees that are unpaid, the process produces an "enpart"
service event. Otherwise, the process produces an "enfull" service
event. If the subscriber primary disbursement schedule is being
processed, the process creates a "dsbfamt" service event.
Otherwise, the process creates a "dsbsamt" service event. If an
enrollment service fee was paid during the processing of the
current disbursement schedule, the process creates an "endfrd"
service event.
[0084] An allocate-curtailment program assigns portions of a
specified subscriber calculated future minimum balance to each of
the associated disbursement schedules that are active and have been
configured to receive curtailment. The calculate next-cycle-dates
calculates cycle dates given the transaction type, cycle type code,
clearing delay, last ideal date and special parameters for
semi-monthly loans. The create-transaction program creates the
necessary transactions for subscription activity, including
subscription transactions, subscription bank account business month
and bank account business month records. The estimate interest
program estimates interest that has not been allocated in the past
for a specified subscription. The process stores the estimated
amounts in the appropriate subscriber bank account bus month
("sbabm") tables and loans the total estimated interest amount to
the subscription from the service fee account. The
subscriber-valid-business-- months are all months that fall between
the subscriber start date and the subscriber closed date, or the
current date, whichever is earliest. The get schedule status
program is used to determine the status of a single receipt or
disbursement schedule. The program returns "active", inactive",
"post active" or "suspend" as the current status, based on the
values of the request, start date, end date, next cycle ideal date
and suspend days. The log SX change creates an SX record for a
specified disbursement schedule if the payee requires
notification.
[0085] Although the invention is described herein with reference to
the preferred embodiment, one skilled in the art will readily
appreciate that other applications may be substituted for those set
forth herein without departing from the spirit and scope of the
present invention. Accordingly, the invention should only be
limited by the claims included below.
* * * * *
References