Member Credit/Liquidity Services

Member Credit FAQs

• What interest rate does Catalyst Corporate charge on its line of credit and term loan offerings?

  Current interest rates on lines of credit and term loans are available on the Lending Rates page. Interest rates for term loans posted on this website each day are “indicator rates.” For the most current rates, contact Catalyst Corporate's Member Credit Department at 800.442.5763, option 6.

• Does Catalyst Corporate require its members to establish a line of credit?

  If a member has settlement transactions through Catalyst Corporate, establishing a line of credit is required. A member may utilize one or more of Catalyst Corporate’s settlement lines of credit as back-up liquidity for settlement transactions. Automated loan advances incur no penalties when used to cover overnight settlement transactions.

• What factors are considered in determining the amount of the line of credit?

  Some of the factors that are considered in determining the amount of a credit union's line of credit include:

  • The credit union's overall creditworthiness.
  • The amount of settlements processed through Catalyst Corporate.
  • The amount of collateral to be pledged.
  • The credit union's current and anticipated liquidity needs.
  • The amount of collateral pledged to other financial institutions.

• How does a credit union apply for a line of credit or a term loan?

  An officer of the credit union should contact Catalyst Corporate's Member Credit Department to request a Member Credit Application. Once Member Credit receives the application and any other financial documents required, the request is processed. Requests are often processed within one day of receiving the complete application.

• What information is required when requesting a line of credit or other loan product?

  A member requesting a loan from Catalyst Corporate should provide the following information:

  • A completed Catalyst Corporate Member Credit Application.
  • The credit union’s most current NCUA 5300 Call Report or internally prepared financial statements. Financial statements should include a balance sheet, income statement, schedule of delinquent loans and year-to-date loan charge-offs and recoveries.
  • A copy of the credit union’s most recent audit report (if requested by Catalyst Corporate’s Member Credit Department).
  • A detailed listing of collateral, if required.
  • Other financial documents or information as determined.

• What types of collateral does Catalyst Corporate accept?

  • The Standard Settlement Line of Credit is secured by a general pledge of all assets of the credit union.
  • The Performance Settlement Line of Credit is secured by specific collateral.

  Collateral generally accepted by Catalyst Corporate includes:

  • Eligible share certificates or shares on deposit with Catalyst Corporate. The collateral to loan ratio requirement is 1.00:1.00.
  • Acceptable investment securities held in safekeeping by Catalyst Corporate. Catalyst Corporate determines the minimum collateral to loan ratio by reducing the market value of the pledged security by a percentage that is based on the marketability of the security. For example, the minimum collateral to loan ratio for US Treasury bonds would be 1.02:1.00. The minimum collateral to loan ratio for AAA-rated municipal bonds would be 1.43:1.00. Some securities (corporate bonds) have very limited marketability, so Catalyst Corporate assigns them no collateral value.
  • The borrowing credit union’s member auto loan portfolio or government guaranteed student loan portfolio. The collateral to loan ratio requirement is determined at the time of the loan application. It is based on a review of the portfolio to be pledged and the creditworthiness of the member.
  • The Advantage Line of Credit may be secured by a general pledge of the credit union’s assets or by a pledge of specific collateral acceptable to Catalyst Corporate.

• How is an advance against a line of credit obtained?

  An advance against the Standard or Performance Settlement Lines of Credit is obtained through Catalyst Corporate’s TranZact system. An authorized credit union employee can process a loan advance using TranZact or by contacting a Catalyst Corporate Member Service Representative at 800.442.5763, option 1. Loan proceeds are deposited into the credit union's Cash Management Account. If a credit union's transaction account becomes negative at the end of the day's processing due to automated settlement transactions or wire transfers, an amount sufficient to bring the balance in the account to zero will automatically advance from the credit union’s line(s) of credit.

  An advance against an Advantage Line of Credit is obtained by a member credit union using the TranZact system. Advances from this credit line are not tied to a member's settlement activity.

  Catalyst Corporate is not obligated to make any advances under a credit union's line(s) of credit. Any advance is subject to Catalyst Corporate having funds available to make such advance.

• When are loan repayments due?

  A loan advance on any of the three types of lines of credit must be repaid within 12 calendar months after the date on which a loan advance is made.

• How is a loan advance repaid?

  Repayment of a loan advance may be made through TranZact or by contacting a Member Service Representative. A credit union also may mail a check to Catalyst Corporate to repay a loan advance.

• How is interest repaid?

  Accrued interest is due and payable on the 17th of each calendar month. The member has two options for payment. One - voluntarily pay the interest due by the 17th of each month. Two - allow interest to be collected automatically from the member's main transaction account. The amount collected represents accrued interest due through the last day of the prior calendar month. Member repayment of accrued interest is handled the same as repayment of a loan advance.

• What types of term loans does Catalyst Corporate offer?

  Catalyst Corporate can customize the structure of a term loan to meet a member’s needs. For example, term loans may be variable or fixed-rate, bullet or amortizing, and may carry specific options such as call dates. Term loans may carry maturity terms that range from 31 days to a maximum term of five years. Longer maturities may be offered from time-to-time. The credit union may pledge all assets as collateral or specific collateral. Acceptable specific collateral includes:

  • Share certificates or shares on deposit with Catalyst Corporate.
  • Certain investment securities held in safekeeping by Catalyst Corporate.
  • Or, the borrowing credit union’s member auto loan or government guaranteed student loan portfolio(s).

• Can a credit union establish a line of credit or term loan with Catalyst Corporate if it has a loan or line of credit at another financial institution?

  Yes. Different collateral may need to be pledged to each financial institution to avoid overlap. In some cases, a subordination agreement must be obtained.

  Contact Catalyst Corporate’s Member Credit Department at 800.442.5763, option 6 for more information.