Abstract:
The problems presented in loan funding industry are solved by the systems and methods of the present invention. In accordance with one embodiment of the present invention, a system is provided where a borrower applies for and is approved for a loan remotely after which the borrower is provided with data, the borrower then enters the provided data into an automated teller machine and the automatic teller machine verifies the amount to be dispersed and disperses the amount to be lent to the borrower.

Description:
BACKGROUND 
       [0001]    1. Field of the Invention 
         [0002]    The present invention relates generally financial transactions and in particular to loan funding. 
         [0003]    2. Description of Related Art 
         [0004]    Within the lending industry, and in particular within the payday loan market, loans are funded under very controlled and often time-consuming methods. 
         [0005]    For borrowers who have credit ratings that prevent them from getting credit cards or debit cards, the only similar loans are generally referred to as “payday loans.” Payday loans are typically short-term loans meant to bridge a financial gap with a duration of less than two weeks and in an amount less than the borrower&#39;s next paycheck. 
         [0006]    The common payday loan requires the borrower to approach a storefront and apply for the loan. This requires the filling out of an application form, the provision of a government issued ID, a recent pay stub, a recent utility bill from the current home address and a post-dated check for the amount of the loan plus any fees. If approved, the lender will retain the post-dated check. The lender then hands the borrower the amount of the loan in cash. Pay back for the loan is accomplished by depositing the post dated check or through an authorized ACH transaction. 
         [0007]    One problem with this arrangement is that many storefronts that offer this service are concentrated in poor neighborhoods and tend to attract crime against the storefront as well as the borrowers. Therefore, there has been some movement to online, fax, and telephone transactions to avoid the storefront dispensing of cash. The primary problem with these transactions is the funding of the loan. The money may be deposited into the borrowers&#39; checking account by an ACH transaction, but that takes at least 24 hours and will not be processed after 5:00 PM or over the weekend. This means that some loans may take up to 48 hours to fund and a loan processed over the weekend will not fund until the next Tuesday. Other alternatives are available for funding loan including funding a pre-paid debit card account, wire transfer and money transfer. In these cases, the funding of consumer can be processed within minutes of approval of transaction. However, each of these methods will generate an additional expense to fund the loan for the lender that break into the revenue margins and make the transaction less attractive. Some of the lenders will pass the additional cost to the consumer (about $25-$50 for wire transfer, about $10-$30 for money transfer, and about $2.50-$10.00 for loan on pre-paid card, all passed on to the consumer). 
         [0008]    Pre-paid cards are popular because of the wide distribution of the existing ATM networks. A pre-paid card allows the borrower access to their loan at multiple locations, depending on the network being used. This allows far more mobility for the borrower than the other funding mechanisms. The primary problem with the pre-paid card is that the physical card must be delivered to the borrower. This initial wait may frustrate first time borrowers. Further, once a pre-paid card has been drained of loaded value it may be discarded or misplaced, thus requiring another wait time for return borrowers who do not maintain their cards. 
         [0009]    It is important to understand at this point the basic processes used by ATM processors. When a card is entered into an ATM the ATM processor first uses the Bank Identification Number, or BIN (typically the first 6 digits of a card&#39;s number), to determine if the transaction is within the ATM processor&#39;s system or outside it The BIN tells the ATM processor which bank issued the card and what network would be responsible for handling the transactions. If the transaction is within the ATM processor&#39;s system, the information is verified against a local database and the transaction is handled without reference to other lending processors or networks. If the transaction is outside the ATM processor&#39;s system, the consumer request is sent to a regional or national banking network based on the Bank Identification Number. The network will verify the necessary information and send instructions to the ATM processor. 
         [0010]    A need exists, therefore, for a method and system for funding loans that is fast and low cost for all approved borrowers. 
       BRIEF SUMMARY OF THE INVENTION 
       [0011]    The problems presented in loan finding industry are solved by the systems and methods of the present invention. In accordance with one embodiment of the present invention, a system is provided where a borrower applies for and is approved for a loan remotely after which the borrower is provided with data, the borrower then enters the provided data into an automated teller machine and the automatic teller machine verifies the amount to be dispersed and disperses the amount to be lent to the borrower. 
         [0012]    Other objects, features, and advantages of the present invention will become apparent with reference to the drawings and detailed description that follow. 
     
    
     
       BRIEF DESCRIPTION OF THE DRAWINGS 
         [0013]      FIG. 1  is a flow chart of an embodiment of a loan application process; 
           [0014]      FIG. 2  is a flow chart of an embodiment of a loan acceptance process; 
           [0015]      FIG. 3  is a flow chart of an embodiment of a loan funding process; and 
           [0016]      FIG. 4  is a schematic depicting an embodiment of the funding system structure. 
       
    
    
     DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT 
       [0017]    All references cited herein are incorporated by reference to the maximum extent allowable by law. To the extent a reference may not be fully incorporated herein, it is incorporated by reference for background purposes and indicative of the knowledge of one of ordinary skill in the art. 
         [0018]    In the following detailed description of the preferred embodiments, reference is made to the accompanying drawings that form a part hereof, and in which is shown by way of illustration specific preferred embodiments in which the invention may be practiced. These embodiments are described in sufficient detail to enable those skilled in the art to practice the invention, and it is understood that other embodiments may be utilized and that logical mechanical and electrical changes may be made without departing from the spirit or scope of the invention. To avoid detail not necessary to enable those skilled in the art to practice the invention, the description may omit certain information known to those skilled in the art. The following detailed description is, therefore, not to be taken in a limiting sense, and the scope of the present invention is defined only by the appended claims. 
         [0019]      FIGS. 1-3  show the processes of an embodiment of the loan funding system  10 , with  FIG. 1  showing the loan application process  100 ,  FIG. 2  the loan acceptance process  200  and  FIG. 3  the loan funding process  300 . The processes work together to form the loan funding system, although minor modifications to the processes can be made without deviating from the system  10 . 
         [0020]      FIG. 1  is a flow chart of an embodiment of a loan application process  100  of the loan funding system  10 . The loan application process begins with a borrower  12  contacting a lender  14  as shown in step  102 . This contact typically occurs via the world wide computer network commonly referred to as the internet or world wide web as borrower  12  points a browser to a web site connected with lender  14 . The contact of step  102  may also occur over typical phone lines, fax, wireless text messaging (such as SMS), or even in-person or at a kiosk. Borrower must then provide data  124  for the loan application to the lender as shown in step  104 . This data  124  will typically include personal, employment, and bank information relating to the borrower  12 . This data  124  may also include the borrower&#39;s  12  personal references, including names and phone numbers. The personal information would include name, Social Security Number (SSN), driver license number, date of birth and contact information such as phone numbers and residential address. The employment information could include employer name, address, work phone number, monthly income, start date and pay period, and next two payday dates. The banking information could include all information necessary for the lender to schedule an ACH transfer from the borrower&#39;s account to the lender&#39;s account at the end of the loan period, such as bank name, bank routing number, bank account number, and type of account. In step  106 , borrower  12  selects a loan amount to request from the lender  14  and in step  108  the borrower reviews and accepts the basic terms of the loan application. 
         [0021]    The above steps have provided the lender data necessary for the lender  14  to process the application and determine whether to fund the requested amount, a lower amount, or to decline the loan request completely. Step  110  is the processing step and step  112  shows the results of the processing. In step  114 , the lender  14  notifies the borrower  12  of the decision. In most cases this notification will be nearly automatic as the lender  14  may have automate verification and processing. In some cases, the data may not allow for automated processing and human intervention may slow the process down. Notice is sent via some means to the borrower that the loan has been approved, approved for less than requested, or declined. 
         [0022]      FIG. 2  is a flow chart of an embodiment of a loan acceptance process  200  as is required if a loan has been approved in the loan application process  100 . Loan approval process  200  is shown as an automated process using the computer network known generally as the internet or world wide web. The borrower  12  logs in to a borrower account on a web site associated with the lender  14  as shown in step  202  by either pointing a browser to the web site or activating a link in a message sent to borrower by some means such as email or text messaging. After logging in borrower  12  may choose to display loan details as shown in step  204 . Borrower  12  may then review the terms of the loan and either accepts or declines as shown in step  205 . If borrower  12  declines as shown in step  206 , then the loan status is set to “decline” as shown in step  208  and a loan declined confirmation message is sent to borrower  12  as shown in step  210 . A loan with a status of decline may not be funded. If borrower  12  accepts the terms as shown in step  212 , then an ACH Agreement will be displayed for borrower  12  to review and either accept or decline as shown in step  214 . If borrower  12  declines as shown in step  206  then the loan status is set to “decline” as shown in step  208  and a loan declined confirmation message is sent to borrower  12  as shown in step  210 . If borrower  12  accepts as shown in step  216 , borrower must then choose a funding option as shown in step  218 . Typically the funding options will be either ACH or ATM, although other funding options known in the art, such as pre-paid cards or wire transfer, may be available as well. Once a funding option has been chosen, a borrower agreement may be generated as shown in step  220 . Borrower  12  would then review the borrower agreement and either accept or decline as shown in step  221 . If borrower  12  declines as shown in step  206 , then the loan status is set to “decline” as shown in step  208  and a loan declined confirmation message is sent to borrower  12  as shown in step  210 . If borrower  12  accepts the borrower agreement as shown in step  222 , then the loan status is set to “accept” as shown in step  224  and a loan accepted confirmation message is sent to borrower as shown in step  226 . If ATM funding was chosen in step  218 , then a funding access code  232  is generated and sent to the borrower  12  as shown in step  228 . 
         [0023]      FIG. 3  is a flow chart of an embodiment of a loan funding process  300 , which begins with the borrower  12  approaching a participating ATM and selecting the “GetCash” option as shown in step  302 . Of course, the “GetCash” button may be any moniker sufficient to distinguish the following transaction from a normal ATM transaction, in important part providing a field for entering a access code  332  and some personal data  324 , such as the last four digits of a social security number, as shown in steps  304  and  306  respectively. “GetCash” is used in this section as a shorthand for a payday loan transaction funded through an ATM without the use of a card. The ATM will format the entered data and send it to the ATM processor  338  as shown in step  307 . If the ATM processor  338  determines in step  308  that the data is an ordinary ATM transaction as shown in step  310 , then it will process accordingly as shown in step  312 . If the ATM processor  338  determines in step  308  that the request is a “GetCash” transaction as shown in step  314 , then the ATM processor  338  will parse the request and send the request to the lending processor  334  as shown in step  315 . The lending processor  334  will validate the access code  332  as shown in step  316 . If access code  332  is not valid, then the lending processor will send a decline message to the ATM processor as shown in step  318 . If the access code  332  is valid, then the lending processor  334  will validate the personal information sent, such as the last four digits of the social security number as shown in step  320 . If the personal information is not valid, then the lending processor  334  will send a decline message to the ATM processor  338  as shown in step  322 . If the personal information is valid, then the lending processor  334  will authorize the funding as shown in step  340  thus sending a authorization to the ATM processor  338  as shown in step  342 . The lending processor will also mark the borrower account as funded to prevent multiple fundings from one account as shown in step  344 . After receiving the authorization from the lending processor  334 , the ATM processor  338  will parse the lending processor authorization as shown in step  346  and send an ATM Dispense Command to the ATM as shown in step  348 . The ATM may also print a customer receipt as shown in step  350 . 
         [0024]    Much of the communication above is not dependent on any particular infrastructure and will be adaptable to new infrastructures. For example, communications between ATMs, ATM processors, and the lending processor are all done in accordance with ISO8583 as it is currently implemented, but will likely change if there are advances in these types of communications. 
         [0025]      FIG. 4  is a schematic depicting an embodiment of the funding system  10  using existing ATM networks to fund loans without the requirement of a bank card. In this embodiment of the funding system  10  borrower  12  is borrowing money from lender  14 . Borrower  12  and lender  14  can communicate via a remote communication link  416  such as a telephone, fax, wireless messaging (such as SMS text messaging), or computer network. The key is that borrower  12  need not be in the vicinity of lender  14  and vice versa. Borrower  12  will transmit borrower data  424  to lender  14 . 
         [0026]    Upon receipt of the borrower data  424 , lender  14  must determine if a loan will be approved as described above. If approved, lender  14  creates a record  428  associating a loan amount  430  with an access code  432 . Access code  432  must be a human readable data set, such as a string of alphanumeric data. Typically a string of numeric data, such as a 16 digit numeric code will be the access code  432 . Lender  14  will typically transmit the record  428  to a lending processor  434 . A portion of the borrower data  424 , such as a social security number or mother&#39;s maiden name, is typically paired with the record  428  to insure the identity of the borrower  412  at an automated teller machine  436 . As shown, lender  14  and lending processor  434  may be the same entity. 
         [0027]    Borrower  12  can take the access code  432  to any automated teller machine  436  on the same network as lender  14  or lending processor  434  and request dispersal of the loan amount  430  by entering the access code  432 . Access code  432  is typically entered through existing input means on the automated teller machine  436  such as a keypad or onscreen input field. Automated teller machine  436  may request additional data such as a portion of the borrower data  424  to verify borrower  12  identity. Automated teller machine  436  then transmits the access code  432  to an ATM processor  438 . The ATM Processor  438  parses and validates the data  424  as described above with lending processor  434 . If additional borrower data  424  has been collected, it is also transmitted to verify borrower  12  identity. Lending processor  434  responds to ATM Processor  438  with a loan amount  430  and then marks the record  428  as funded. ATM Processor  438  instructs Automated teller machine  436  to dispense the loan amount. 
         [0028]    The primary advantage of the present invention is that borrower and lender do not have to be in the same location and borrower can retrieve funds nearly instantaneously after a funding decision has been made. 
         [0029]    It should be apparent from the foregoing that an invention having significant advantages has been provided. While the invention is shown in only a few of its forms, it is not just limited but is susceptible to various changes and modifications without departing from the spirit thereof.