System and method for an emergency reserve during a covered event using actuarial data

• US 8,706,613 B2
• Filed: 08/15/2007
• Issued: 04/22/2014
• Est. Priority Date: 08/15/2007
• Status: Active Grant

• Current Assignee: Bank of America Corp.
• Original Assignee: Bank of America Corp.
• Inventors: Bierer, Jeffrey H., Kramer, Andrew, Mauldin, Robert M., Myrick, Thomas
• Primary Examiner(s): Shaikh, Mohammad Z
• Application Number:
  US11/839,066
• Publication Number:
  US 20090048972A1
• Time in Patent Office: 2,442 Days
• Field of Search: 705 35- 45
• US Class Current: 705/38
• CPC Class Codes: G06Q 20/10 specially adapted for electronic funds transfer [EFT] systems; specially adapted for home banking systems
• CPC Class Codes: G06Q 20/40 Authorisation, e.g. identification of payer or payee, verification of customer or shop credentials; Review and approval of payers, e.g. check credit lines or negative lists
• 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 providing emergency conditional credit to a customer of a financial institution. The system includes a customer site and a financial institution. The financial institution determines actuarial data using past history of customers incurring specified events, the actuarial data useable to predict future specified events, determines a cost for offering an emergency reserve (ER) product using the actuarial data, determines a qualification standard for the ER product, and offers the ER product to a person at the customer site. An emergency reserve protection (ERP) feature that provides protection that cancels any ER balance on a monthly basis during a covered event may also be offered to customers. One or more vendor sites may be used to handle some of the processing or managing of the ER and ERP product offerings.

Claims

1. A method for providing conditional credit comprising:

receiving, by a computing device processor, past history of customers incurring predetermined events;

determining, by the computing device processor, actuarial data using the past history of customers incurring predetermined events, the actuarial data useable to predict future events;

determining, by the computing device processor, a cost for offering an emergency reserve (ER) product using the actuarial data;

determining, by the computing device processor, a qualification standard for the ER product;

offering the ER product to the customers or potential customers based at least in part on the qualification standard;

offering an optional emergency reserve protection (ERP) feature to the customers or the potential customers, the ERP feature providing protection that cancels any owed ER balance during a covered event;

receiving, from a customer that accepted the offer of the ER product and the ERP feature, a first indication that one of a plurality of covered events has occurred and a request for a first credit disbursement from the ER product;

verifying the customer'"'"'s occurrence of the covered event and that the customer is current in paying a periodic assessment associated with the ER Product;

automatically providing, by the computing device processor, the first credit disbursement to the customer based on verification of the covered event, wherein the first credit disbursement is for a predetermined amount that is less than a maximum credit disbursement amount of the ER product and for a predetermined period of time;

receiving, from the customer proximate in time to expiration of the predetermined period of time, a second indication that the covered event continues to occur and a request for a second credit disbursement from the ER product;

verifying the customer'"'"'s continual occurrence of the covered event and that the customer is current in paying the periodic assessment associated with the ER Product;

automatically providing, by the computing device processor, the second credit disbursement to the customer based on verification of the covered event wherein the second credit disbursement is for the predetermined amount and for the predetermined period of time;

determining that the customer has accrued an owed ER balance as a result of the first credit disbursement and the second credit disbursement; and

canceling, by the computing device processor, the owed ER balance based upon (i) determining that the customer has accrued the owed ER balance as a result of the first credit disbursement and the second credit disbursement and (ii) the customer'"'"'s acceptance of the offer of the ERP feature.

2. The method according to claim 1, wherein the customer is eligible for the credit disbursements if the customer has previously purchased the ER product, has requested the credit disbursement for an entered event, and the entered event is said covered event.

3. The method according to claim 1, wherein the covered event comprises at least one of involuntary unemployment, disability, hospitalization, lifecycle events, moving, childbirth, or retirement.

4. The method according to claim 1, wherein determining the qualification standard further comprises determining the qualification standard using credit score information, alternative credit scoring information employing at least one of utility data and telecommunications payments data, and proprietary customer behavioral data.

5. The method according to claim 4, wherein the credit score information comprises at least one of Fair, Isaac and Company (FICO) information, Fair, Isaac and Company'"'"'s Expansion Score or LexisNexis RiskView.

6. The method according to claim 4, wherein the qualification standard comprises credit scores lower than credit scores required for credit card qualification.

7. The method according to claim 4, wherein the qualification standard comprises at least one of no hit or ‘

thin-file’

credit scores.

8. The method according to claim 1, further comprising:

receiving acceptance of the offer from one or more of the customers; and

charging the customers that accept the offer a periodic assessment for the ER product.

9. The method according to claim 8, wherein automatically providing further comprises

performing, by the computing device processor, one of directly depositing the first or second credit disbursement into an account of the customer or initiating mailing a check for the first or second credit disbursement to the customer.

10. The method according to claim 1, wherein offering further comprises offering the ER product to a financial institution'"'"'s customers or the financial institution'"'"'s potential customers by one of the financial institution or a third party for the financial institution.

11. The method according to claim 10, wherein offering further comprises offering the ER product to the financial institution'"'"'s customers or the financial institution'"'"'s potential customers by the third party for the financial institution, the third party further performing at least one of sending materials offering the ER product to a financial institution'"'"'s customers or the financial institution'"'"'s potential customers, processing customer applications for the ER product, approving and denying customer applications for the ER product and notifying customers accordingly, receiving the requests for the credit disbursements for the entered event, verifying that the entered event is a covered event, approving and denying requests for the credit disbursements for the entered event, or sending information regarding the ER product to the customer after the processing is completed and the customer is approved.

12. The method according to claim 1, further comprising offering, along with the ER product, optional emergency reserve protection (ERP) feature to the customers or the potential customers, the ERP feature providing protection that cancels any ER balance on a monthly basis during a covered event.

13. The method according to claim 12, further comprising:

receiving acceptance of the ER product and the ERP feature offers from one or more of the customers; and

charging the customers that accept the ER product and ERP feature offers a first periodic assessment for the ER product and a second periodic assessment for the ERP feature.

14. The method according to claim 12, wherein offering the ERP feature further comprises offering the ERP feature to the customers or the potential customers by one of a financial institution or a third party for the financial institution.

15. The method according to claim 14, wherein offering the ERP feature further comprises offering the ERP feature to the customers or the potential customers by the third party for the financial institution, the third party further performing at least one of sending materials offering the ERP feature to customers, processing customer applications for the ERP, or sending information regarding the ERP feature to the customer after the processing is completed.

16. The method according to claim 1, wherein determining the cost further comprises determining the predetermined amount of the credit disbursements, the predetermined period of time, and the maximum credit disbursement amount of the ER product.

17. The method according to claim 1, further comprising determining if the customer has been provided a previous credit disbursement from the ER product.

18. The method according to claim 17, further comprising determining if a total credit disbursement made to the customer equals the maximum credit disbursement amount and performing one of providing a credit disbursement for the covered event if the maximum credit disbursement amount has not been paid or denying the request for a credit disbursement for the covered event if the maximum credit disbursement amount has been paid.

19. A system for providing conditional credit comprising:

a computing device having a memory and a processor;

a first application stored in the memory, executable by the processor and configured to receive past history of customers incurring predetermined events and determine actuarial data using the past history of financial institution customers incurring specified events, the actuarial data useable to predict future specified events;

a second application stored in the memory, executable by the processor and configured to determine a cost for offering an emergency reserve (ER) product and an optional emergency reserve protection (ERP) feature using the actuarial data, and determine a qualification standard for the ER product and the ERP feature;

a third application stored in the memory, executable by the processor and configured to automatically provide a first credit disbursement from the ER product to a customer that has (1) accepted an offer for the ER product and the ERP feature, the ERP feature providing protection that cancels any owed ER balance during a covered event, and (2) requested the first credit disbursement based on an occurrence of one of a plurality of covered events, based on verification of the occurrence of the covered event and verification that the customer is current in paying a periodic assessment associated with the ER Product, wherein the first credit disbursement is for a predetermined amount that is less than a maximum credit disbursement amount of the ER product and for a predetermined period of time;

provide a second credit disbursement from the ER Product to the customer that has requested, proximate in time to expiration of the predetermined period of time, the second credit distribution based on continual occurrence of the covered event, based on verification of the continual occurrence of the covered event and verification that the customer is current in paying the periodic assessment associated with the ER Product, wherein the second credit disbursement is for the predetermined amount and for the predetermined period;

determine that the customer has accrued an owed ER balance as a result of the first credit disbursement and the second credit disbursement; and

cancel the owed ER balance based upon (i) determining that the customer has accrued the owed ER balance as a result of the first credit disbursement and the second credit disbursement and (ii) the customer'"'"'s acceptance of the offer of the ERP feature.

20. An article, the article comprising a non-transitory computer-readable storage medium with instructions stored therein, the instructions when executed causing a processing device to perform:

receiving past history of customers incurring predetermined events;

determining actuarial data using the past history of customers incurring predefined events, the actuarial data useable to predict future specified events;

determining a cost for offering an emergency reserve (ER) product using the actuarial data;

determining a qualification standard for the ER product;

offering the ER product to the customers or potential customers based at least in part on the qualification standard;

offering an optional emergency reserve protection (ERP) feature to the customers or the potential customers, the ERP feature providing protection that cancels any owed ER balance during a covered event;

receiving, from a customer that accepted the offer of the ER product and the ERP feature, a first indication that one of a plurality of covered events has occurred and a request for a first credit disbursement from the ER product;

verifying the customer'"'"'s occurrence of the covered event and that the customer is current in paying a periodic assessment associated with the ER Product;

automatically providing the first credit disbursement to the customer based on verification of the covered event, wherein the first credit disbursement is for a predetermined amount that is less than a maximum credit disbursement amount of the ER product and for a predetermined period of time;

receiving, from the customer proximate in time to expiration of the predetermined period of time, a second indication that the covered event continues to occur and a request for second credit disbursement a second credit disbursement from the ER product;

verifying the customer'"'"'s continual occurrence of the covered event and that the customer is current in paying the periodic assessment associated with the ER Product;

automatically providing the second credit disbursement to the customer based on verification of the covered event wherein the second credit disbursement is for the predetermined amount and for the predetermined period of time;

determining that the customer has accrued an owed ER balance as a result of the first credit disbursement and the second credit disbursement; and

canceling the owed ER balance based upon (i) determining that the customer has accrued the owed ER balance as a result of the first credit disbursement and the second credit disbursement and (ii) the customer'"'"'s acceptance of the offer of the ERP feature.

21. The article according to claim 20, wherein the covered event comprises at least one of involuntary unemployment, disability, or hospitalization.

22. The article according to claim 20, wherein the qualification standard is determined using credit score information.

23. The article according to claim 22, wherein the qualification standard comprises at least one of no-hit or thin file credit scores.

24. The article according to claim 20, the instructions when executed further causing the processing device to perform charging customers a periodic assessment for the ER product.

25. The article according to claim 20, the instructions when executed further causing the processing device to perform one of directly depositing the credit disbursements into an account of the customer or initiating mailing a check for the credit disbursements to the customer.

26. The article according to claim 20, the instructions when executed further causing the processing device to perform offering optional emergency reserve protection (ERP) feature to ER customers, the ERP feature providing protection that cancels any ER balance on a monthly basis during a covered event.

27. The article according to claim 26, the instructions when executed further causing the processing device to perform charging customers a period assessment for the ERP feature.