Frequently Asked Questions about Flow of Funds
- Why is the flow of funds important and why must I make it? Why can’t you make the flow of funds based on our project’s understanding (as you comprehend it)?
- Can we alter the flow of funds as per our requirements?
- Can we operate on a funds good & settled model? Please clarify steps of responsibility in the flow of funds.
Why is the flow of funds important and why must I make it? Why can’t you make the flow of funds based on our project’s understanding (as you comprehend it)?
The flow of funds is extremely important. You may have worked on it for months, Solution Providers usually glance at it for 5 minutes before making their decision. If you can elaborate on your Flow of Funds (FoF) and transaction set, it would help immensely. Also, we need it from you, for legal reasons, so that nothing was lost in translation and also, the way ‘you’ envisioned it.
You can draw it on a white-board or a white-piece of paper. Use your mobile phone to record while you explain what all is going on, how the transaction is originating, and how the transaction is terminating.
Once you’ve done this, you can WhatsApp this to us at: +13129576797.
Looking forward to your submission.
Can we alter the flow of funds as per our requirements?
No. The flow of funds shall be as per the solution provider’s FoF program.
Can we operate on a funds good & settled model? Please clarify steps of responsibility in the flow of funds.
As per the CFPB (Consumer Finance Protection Bureau) and the way state regulators would look at this, they would like the funds to be released only after the payout party has been paid, i.e. the beneficiary has been paid. This is why pre-funding is used. The license holder holds back on the funds, till such time that proof of delivery is provided for by the payout party. The funds good and settled model is already in play, as no credit is being extended by the solution provider (i.e. license holder) to you, and only the funds that are good and settled are pushed into your account, after proof of payment has been provided for.
This page was last updated on December 24, 2020.