Statuses

Overview

Statuses provide a standardized framework for managing the lifecycle of advances, loans and lines of credit within the Canopy platform. This feature introduces structured states that govern how loans behave based on their operational or regulatory status, replacing ad-hoc approaches with consistent, predictable system behavior.

These statuses operate at the advance, line or loan level (not at the account) and have different states for each type of lending construct.

Each status automatically enforces specific behaviors which the documentation covers below, while maintaining compatibility with Canopy's existing tagging system for additional context and customization.

Use Cases

Risk Management and Fraud Prevention

When a loan requires fraud investigation or risk review, operations teams can manually move the loan to the Suspended status by calling the endpoint to update the status of a line of credit.

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This immediately restricts the borrower's ability to draw additional funds while allowing the servicing team to conduct their review. Once the review is complete, the loan can be moved to a status like Active in which case, draws will continue to be allowed on the line.

End-of-Life Loan Processing

For loans that have reached their natural conclusion, Canopy's status system will automate critical behaviors.

When a borrower makes their final payment, the system automatically transitions the loan to a Paid Off status, stopping interest accrual and cyclical fee processing. Similarly, when a loan is moved to a Charged Off status, the system stops accruing interest while still allowing recovery payments to be processed and tracked appropriately.

Implementation Steps

1. API Integration

Statuses are included in relevant API responses for lines of credit. Update your integration to consume the status field in LOC endpoints like get a line of credit and during creation of a line of credit . The current status is returned in these requests and state transitions can be tracked through subscribing to notifications.

2. State Transition Management

Implement logic to handle both automatic and manual state transitions:

Automatic Transitions:

• New LOCs start with an Active status
• LOCs automatically move to Paid Off when balance reaches zero
• Configure notification handlers to respond to automatic state changes

Manual Transitions:

• Use the dedicated endpoint to update statuses on a line of credit for operational changes like suspending or charging off an account
• Ensure proper authorization controls for manual state changes

3. Reporting and Monitoring

Statuses are available in the Accounts Report and Delinquency Report, and can be included in any custom reporting or analytics workflows you've built around loan performance.

Frequently Asked Questions

How do Statuses differ from Tags?

Statuses provide core behavioral control over loan functionality, while Tags offer additional context and support custom business logic. Statuses are mutually exclusive (a loan can only be in one state at a time), whereas multiple Tags can be applied simultaneously. Use Statuses for fundamental operational controls and Tags for additional categorization or custom workflows.

Can I reverse a status transition?

Some status transitions can be reversed while others cannot. Suspended loans can be returned to an Active status through the use of the update status endpoint. However, Paid Off and Charged Off statuses are generally considered final, though the system will still process payments applied to these loans.

Do state changes affect card products?

For LOCs with associated card products, status changes may require synchronization with the card issuer. Suspended status typically requires freezing associated cards, while returning to Active status would unfreeze them. Consult with your implementation team about card processor integration requirements.

How are payments handled in different statuses?

Payment processing varies by status:

• Active: Normal payment processing and pouring
• Suspended: Payments accepted with normal processing
• Paid Off: Payments accepted but no cyclical charges generated
• Charged Off: Payments processed as "recoveries" with special accounting treatment

Can I get a history of status changes?

Yes, status transition history is tracked and available through the API. This includes timestamps for each status change and supports audit trails for compliance and operational review purposes.

What cyclical events are affected by state changes?

Paid Off and Charged Off states stop the processing of cyclical events including:

• Interest accrual
• Fee assessment
• Scheduled payment processing
• Statements
• Other recurring account maintenance events

Payment processing and manual adjustments remain available in these statuses.