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Curious how other funders write these. NSF and negative-day rules tend to cause more back-and-forth between underwriting and sales than anything else, usually because the rule was never written down precisely.
A few things that seem to make a rule hold up:
1. Name the window. "NSFs in the last 90 days" and "NSFs in the most recent full statement month" are different rules.
2. Say what counts. Is a returned ACH an NSF? Does an overdraft fee count the same as a returned item? Do reversed NSFs drop out?
3. Pick the action. Hard stop, soft flag for a person, or an exception with a named approver. Most rules belong in the second bucket.
4. Restricted industries need a source. Stated industry on the app vs what the deposits and web presence show often disagree, so decide which one the rule reads.
5. Version the rule. When the threshold changes, you want to know which version decided an older file.
6. Replay before you change it. Run the new threshold against last quarter's funded and declined files and see who moves.
How are you all handling this? Especially interested in how you treat NSFs that clear the same day, and whether negative days count calendar or business days.
We wrote up the longer version with example rule definitions here (thresholds are illustrative, not recommendations): https://www.cevrynt.com/blog/mca-und...ckout-criteria
Arin, Cevrynt
A few things that seem to make a rule hold up:
1. Name the window. "NSFs in the last 90 days" and "NSFs in the most recent full statement month" are different rules.
2. Say what counts. Is a returned ACH an NSF? Does an overdraft fee count the same as a returned item? Do reversed NSFs drop out?
3. Pick the action. Hard stop, soft flag for a person, or an exception with a named approver. Most rules belong in the second bucket.
4. Restricted industries need a source. Stated industry on the app vs what the deposits and web presence show often disagree, so decide which one the rule reads.
5. Version the rule. When the threshold changes, you want to know which version decided an older file.
6. Replay before you change it. Run the new threshold against last quarter's funded and declined files and see who moves.
How are you all handling this? Especially interested in how you treat NSFs that clear the same day, and whether negative days count calendar or business days.
We wrote up the longer version with example rule definitions here (thresholds are illustrative, not recommendations): https://www.cevrynt.com/blog/mca-und...ckout-criteria
Arin, Cevrynt
