Pennsylvania Credit Union Association Partners With Floyd & Associates for Overdraft Privilege Program Program Helps Members Avoid Negative Consequences of Bounced Share Drafts (Checks)

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Pennsylvania Credit Union Assn. -- representing the state with the most credit unions -- partners with John M. Floyd & Associates of Houston to offer Overdraft Privilege to 3.5 million C.U. members to cover their insufficient funds checks -- automatically and with less hassel, cost, embarrassment and inconvenience.

The Pennsylvania Credit Union Association (PCUA) has signed an agreement with John M. Floyd & Associates, Inc. (JMFA) of Houston naming the profitability-consulting firm as its "Preferred Business Partner" for the JMFA OVERDRAFT PRIVILEGE(SM) program.

Founded in 1934 to help organize credit unions, PCUA is a statewide, full service financial trade association representing affiliated credit unions. With 694 credit unions and nearly 3.5 million members, Pennsylvania has the most credit unions of any state in the union. Pennsylvania credit unions reported assets of $ $21.3 billion at Sept. 30, 2003.

Credit union organizations in Alabama, Florida, Hawaii, Michigan, Mississippi, New Jersey, New Mexico, Tennessee, Texas and Vermont, as well as the Credit Union League of the West (CA, NV, WA, OR) and CUNA Strategic Services, Inc., have also teamed with JMFA during the past year for its product (

“The public is demanding value-added services like overdraft privilege,” CEO John M. Floyd has told both the Consumer Advisory Council to the Federal Reserve System and the Consumer Federation of America. “This discreet service avoids the embarrassment of members ‘making good’ on a share draft (check) with a valued retailer. Neither the member nor the merchant loses time or productivity in straightening out an NSF (insufficient funds) mess,” Floyd says. “Members don’t wind up on retailers’ bad check lists.

"Members can avoid multiple NSF charges from a merchant or late payment penalties on mortgages, car loans or tuition payments. They also can prevent negative entries on their credit record or potential visits from law enforcement for inadvertent -- but repeated-- bad checks or share drafts,” he added.

Diligent Search Member Friendly Program

“With overdraft privilege, Pennsylvania credit unions have the opportunity to enhance member satisfaction while also increasing their non-interest fee income,” noted James J.

McCormack, President/CEO of PCUA.

“The Association diligently researched and compared suppliers and programs before partnering with Floyd & Associates,” said Bob Hinchey, PCUA’s Executive Vice President of Fee Services. “Our goal was to identify an outstanding partner that will combine all the benefits of an overdraft program with the credit union philosophy of focusing on the member’s well being. I am convinced that our partnership with Floyd & Associates will help credit unions implement a member-friendly program,” Hinchey added.

Overdraft Programs Vary Widely

JMFA, founded in 1973, is a leading provider of noninterest or fee income products to financial institutions. The company has installed profit improvement programs in 1,650-plus financial institutions, adding more than $10 billion in increased pre-tax earnings for its clients. The company also has successfully implemented variations of its overdraft privilege program in more than 550 credit unions, banks and thrifts.

“JMFA’s overdraft privilege program ( is nondiscriminatory and 100% compliant with federal and state regulations, as well as with recently suggested changes,” Floyd emphasized. “Our program has a proven track record of producing more income and less charge-offs.” He also disclosed:

     •    Of 18,000 financial institutions in the United States, more than 2,000 are estimated to now have defined and communicated overdraft programs.

     •    The typical fee charged on an insufficient funds (NSF) check is $17 to $35. The average is $22.50.

     •    Studies indicate the average customer or member writes about 3.4 NSF items per year.

“A well-managed overdraft program is a win-win-win for the consumer, the merchant and the financial institution,” he said. “Additionally, automated programs help identify troubled accountholders for necessary counseling.”

The Federal Reserve System, at the urging of consumer advocate groups, including the National Consumer Law Center, has been reviewing compliance issues concerning “bounce protection” and similar overdraft programs. Some critics contend the programs need stricter controls under the Truth in Lending Act, however, the Fed decided in March 2003 to make no regulatory changes at that time, but to continue gathering information on the programs.

Floyd has been speaking from coast to coast this past year emphasizing the multiple benefits of overdraft programs, as well as the unfair practices endemic to the implementation, marketing and management of some overdraft programs. Some bounce or overdraft protection programs are discriminatory, over-promote the service, under-educate consumers on its use and base overdraft limits on a “mystery matrix,” he has advised consumers, regulators and bankers.

Brian R. Witt, chairman of the Credit Union Committee of the American Bar Association, agreeing with Floyd’s premise, stated in the May issue of Credit Union Magazine: “The hidden, unquantifiable costs of not covering overdrafts could be more insidious than the overdraft fees now imposed under current disclosure laws.”

JMFA creates strategic programs, including PRIVILEGE MANAGER CRM(TM) software, specific to each credit union, its organization and its market that maximizes all aspects of NSF revenue. It then delivers expert training, marketing and software to assure successful implementation and full regulatory compliance.

About the Pennsylvania Credit Union Association:

Credit unions are non-profit financial cooperatives that provide affordable financial services to help their owner/members. The Pennsylvania Credit Union Association, based in Harrisburg, provides legislative, professional development, and operational support and services for nearly 700 credit unions in Pennsylvania. These credit unions have assets in excess of $21 billion and serve nearly three and a half million members. For more information, visit the PCUA Web site at

JMFA OVERDRAFT PRIVILEGE(SM) and PRIVILEGE MANAGER CRM (TM) are service marks of John M. Floyd & Associates, Inc. PRIVILEGE MANAGER CRM(TM) is patent pending.


John M. Floyd, CEO, John M. Floyd & Associates, Houston, 800-809-2307 or 281-424-3800;

Web site,; e-mail,

Preston F. Kirk, APR, Kirk Public Relations, Austin TX, 830-693-4447;

Jay Young, Director, Marketing, Pennsylvania Credit Union Association, Harrisburg, PA, 717-234-3156 ext. 5327; Fax: 717-234-2695,

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Preston F. Kirk, APR