IBAT and CBAO Endorse Floyd & Associates to Offer Overdraft Privilege Program - Program Helps Consumers Avoid Hassle, Added Costs of Bounced Checks

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Independent Bankers in Texas and Oklahoma select John M. Floyd -- a leading vendor of regulatory compliant, nondiscriminatory overdraft software -- for its JMFA Overdraft Privilege program. The program helps accountholders avoid embarrassment, extra cost and hassel when the write a check on an overdrawn account.

Texas and Oklahoma consumers who bounce checks can avoid embarrassment, inconvenience and onerous costs, if their bank offers a new overdraft privilege program being extended through members of the Independent Bankers Assn. of Texas (IBAT) and the Community Bankers Association of Oklahoma (CBAO).

IBAT and its subsidiary, IBAT Services, Inc., have signed an agreement with John M. Floyd & Associates, Inc. (JMFA) of Houston naming the profitability-consulting firm as its "Endorsed Provider" for the JMFA OVERDRAFT PRIVILEGE(SM) program.

IBAT, formed in 1974, represents the views of 500+ community banks -- independently owned and operated financial institutions with combined assets of more than $96 billion. IBAT's membership also includes more than150 corporate entities with ties to the financial services industry.

CBAO is a trade association representing about 80 banks with combined assets of $6.3 billion domiciled in Oklahoma. IBAT and CBAO, which formed an alliance in October 2002, are the primary voice for the two states’ independent banks. Financial organizations in about 20 states have teamed with JMFA during the past year for its “courtesy pay” product (http://www.OverdraftPrivilege.com).

Discreet, Value-Added Service

“The public is demanding value-added services like overdraft privilege,” CEO John M. Floyd has told the Consumer Advisory Council to the Federal Reserve System, the American Bar Assn. and the Consumer Federation of America during the past year.

“This discreet service avoids the embarrassment of bank customers ‘making good’ on a check with a valued retailer or creditor. Neither the accountholder nor the merchant loses time or productivity in straightening out an NSF (insufficient funds) mess,” Floyd says. “Accountholders don’t wind up on retailers’ bad check lists.

“They 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,” he added.

“With overdraft privilege, Texas and Oklahoma banks have the opportunity to enhance customer satisfaction while also increasing their non-interest fee income,” noted Chris Williston, CAE, President/CEO of IBAT. “Fee income has become more important to bottom lines in an era of declining income from lending.”

“We are proud to add Floyd & Associates to our select list of endorsed providers,” said Ramona Jones, president of IBAT Services. “JMFA’s portfolio of products coupled with its competitive pricing and well-recognized customer service clearly made it the best choice for us.”

“Our goal was to identify an outstanding vendor that would combine all the benefits of an overdraft program with the community bank philosophy of focusing on the customer’s well being," she added. “I‘m convinced our relationship with Floyd will help our members implement consumer-friendly programs.”

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 1,750-plus financial institutions, adding more than $10 billion in increased pre-tax earnings for its clients in 49 states and Central America. The company also has successfully implemented variations of its overdraft privilege program in more than 650 banks, credit unions, S&Ls and thrifts.

“JMFA’s overdraft privilege program is nondiscriminatory and guaranteed to be 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 for financial institutions than typical NSF programs.”

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 in 2003 was $22.50.

•    Studies indicate the average accountholder 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 reviewed compliance issues concerning “bounce protection,” “courtesy pay” and similar overdraft programs for more than a year. Critics contended the programs need stricter controls under the Truth in Lending Act.

The Fed, however, stated on June 7 that the programs should not be covered under that Act. It proposed no substantive restrictions on them, but did propose some minor changes in the way the programs are marketed and invited public comment on those changes within the next 60 days before it will consider issuing a final rule.

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.

JMFA creates strategic programs, including PRIVILEGE MANAGER CRM(TM)software, specific to each bank, 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 IBAT Services Inc.

IBAT Services is the for-profit subsidiary of the Independent Bankers Association of Texas. The IBAT Services board of directors assumes the responsibility of endorsing the products and services that enhance the competitive advantages and profitability of 600+ community bank

members in Texas and Oklahoma. IBAT Services’ purchasing power helps negotiate desirable packages of benefits. These endorsements earn marketing fees that provide funding for its parent to achieve the furtherance of its mission while maintaining the lowest possible dues structure for IBAT members!

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

FOR MORE INFORMATION OR INTERVIEWS:

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

Web site: http://www.OverdraftPrivilege.com; e-mail, John.Floyd@jmfa.com

Preston F. Kirk, APR, Kirk Public Relations, Austin TX, 830-693-4447; kirk@281.com

Ramona Jones, President, IBAT Services, Inc., 512-474-6889, rjones@ibat.org                        

Craig Buford, Community Bankers Association Oklahoma, 405-524-4122; Mobile: 512-694-

9361; cbuford@ibat.org

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Preston F. Kirk, APR