Method and system for extending credit with automated repayment

• US 20070260537A1
• Filed: 05/02/2006
• Published: 11/08/2007
• Est. Priority Date: 05/02/2006
• Status: Active Grant

• Current Assignee: CC Serve Corp. (Atlanticus Holdings Corporation)
• Original Assignee: Compucredit Intellectual Property Holdings Corporation II
• Inventors: Stone, Brian
• Granted Patent: US 7,958,053 B2
• Time in Patent Office: Days
• US Class Current: 705/39
• CPC Class Codes: G06Q 20/042 characterized in that the payment protocol involves at least one cheque
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03

Abstract

A system and method for extending a firm offer of credit contingent upon receiving a one-time authorization to execute recurring automatic withdrawals from a deposit account is provided. In providing the one-time authorization to execute recurring automatic withdrawals, a prospective borrower may elect from a plurality of automatic withdrawal repayment options. One such option is electronic fund transfer, such as the initiation of a withdrawal entry into the Automated Clearing House network. A second option is by the remote creation of a paper negotiable instrument, which is then converted into an electronic substitute check capable of electronic routing. Upon receiving the one-time authorization, the lender may make recurring automatic withdrawals from the borrower'"'"'s deposit account.

Claims

1. A method of providing credit comprising the step of extending a firm offer of credit contingent upon obtaining a one-time authorization to execute recurring automatic withdrawals from a deposit account, wherein the one-time authorization comprises a selection from a plurality of repayment options, wherein at least one of the plurality of repayment options comprises a withdrawal executed by electronic funds transfer.

2. The method of claim 1, wherein the electronic funds transfer comprises a withdrawal entry in an automated clearing house network from the deposit account.

3. The method of claim 2, wherein the deposit account is held by a receiving depository financial institution.

4. The method of claim 3, wherein the withdrawal entry is executed by an originating depository financial institution.

5. The method of claim 1, wherein at least one of the plurality of repayment options comprises a withdrawal executed by creation of a paper negotiable instrument.

6. The method of claim 5, wherein the paper negotiable instrument comprises a remote check creation.

7. The method of claim 5, further comprising the steps of offering the withdrawal executed by electronic funds transfer at a first price and offering the withdrawal executed by creation of a paper negotiable instrument at a second price.

8. The method of claim 7, wherein the first price is less than the second price.

9. The method of claim 1, further comprising the step of denying credit where the one-time authorization is not obtained.

10. The method of claim 1, wherein the deposit account is configured to receive direct deposit transactions.

11. The method of claim 1, wherein at least one of the plurality of repayment options comprises a conversion of a paper check at a point of sale into an electronic debit.

12. The method of claim 1, further comprising the step of extending additional credit upon obtaining the one-time authorization to execute recurring automatic withdrawals by electronic funds transfer.

13. A method of extending credit comprising the steps of:

a. obtaining a routing number for a deposit account;

b. obtaining an identification number for the deposit account;

c. obtaining a one-time authorization to execute recurring automatic withdrawals from the deposit account, wherein the one-time authorization comprises a selection from a plurality of repayment options, wherein at least one of the plurality of repayment options comprises a withdrawal executed by remote electronic funds transfer;

d. determining whether the deposit account is configured to receive the withdrawal executed by remote electronic funds transfer; and

e. approving an extension of credit only where both the one-time authorization is received and the deposit account is configured to receive the withdrawal executed by remote electronic funds transfer.

14. The method of claim 13, wherein the remote electronic funds transfer comprises originating a withdrawal entry in an automated clearing house network.

15. The method of claim 13, wherein at least one of the plurality of repayment options comprises a withdrawal executed by a remotely created check creation process.

16. The method of claim 13, further comprising the steps of:

a. obtaining a name of an applicant;

b. obtaining an address of the applicant; and

c. obtaining a social security number of the applicant.

17. The method of claim 13, further comprising the steps of:

a. obtaining a telephone number of the applicant;

b. obtaining a duration of residence of the applicant;

c. obtaining a date of birth of the applicant; and

d. obtaining an annual income of the applicant.

18. The method of claim 13, further comprising the step of determining whether the deposit account is configured to receive direct deposit transactions.

19. The method of claim 13, wherein the step of determining whether the deposit account is configured to receive the withdrawal executed by remote electronic funds transfer comprises determining whether a financial institution having custody of the deposit account is a receiving depository financial institution.

20. The method of claim 13, further comprising the step of delivering terms and conditions, wherein the terms and conditions comprise a notification that a withdrawal executed by remote electronic funds transfer from the deposit account in an amount at least equal to a minimum payment will occur during any month in which a balance is carried.

21. The method of claim 20, wherein the terms and conditions further comprise a notification that authorization of the withdrawal executed by remote electronic funds transfer from the deposit account is not a requirement for continuation of the extension of credit.

22. The method of claim 13, further comprising the step of collecting repayment by executing at least one of the recurring automatic withdrawals from the deposit account.

24. The system of claim 22, wherein at least one of the plurality of repayment options comprises a recurring withdrawal executed by a remotely created paper negotiable instrument.

25. The system of claim 22, wherein the withdrawal executed by remote electronic funds transfer comprises a withdrawal entry in an automated clearing house network.

23. A system for extending credit, the system comprising:

a. a network information server configured to deliver browser readable content to a client terminal having a browser in communication with an Internet, the network information server providing at least extension of credit application content to the browser with which an applicant may submit a request for a credit, wherein the extension of credit application content comprises a plurality of repayment options, wherein at least one of the plurality of repayment options comprises a recurring withdrawal executed by electronic funds transfer;

b. a processing module operable with the network information server, the processing module being configured to verify that at least an authorization to execute recurring withdrawals from a deposit account is received in conjunction with a completed extension of credit application; and

c. a credit extension module operable with the network information server, the credit extension module being configured to authorize an extension of credit only when the processing module verifies that the at least an authorization to execute recurring withdrawals from the deposit account is received.