Nebraska CUL Service Corp Endorses Floyd & Associates for Overdraft Privilege Program

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Nebraska Credit Union League has endorsed and will co-market John M. Floyd & Associates' JMFA Overdraft Privilege program to its 70 affiliate credit unions in the state. The nondiscriminatory, automated software program helps credit union members avoid embarrassment, inconvenience and added costs when they overdraw their checking/share draft accounts.

Members of Nebraska credit unions who bounce share drafts (checks) can avoid embarrassment, inconvenience and additional costs if their credit union offers a new overdraft privilege program endorsed by Nebraska CUL Service Corporation. The business subsidiary of the Nebraska Credit Union League, has signed an agreement with John M. Floyd & Associates, Inc. (JMFA) of Houston, naming the profitability consulting firm as its "Strategic Partner" for the JMFA OVERDRAFT PRIVILEGE(SM) program.

The League, formed in 1934, represents 70 of the 77 credit unions in the state. Those members manage combined assets of more than $2.34 billion for its more than 408,000 accountholders. The League, the primary trade association for Nebraska credit unions, provides information, legislation and education to its affiliated members. The Service Corporation provides products and services that help its affiliates effectively compete and prosper in the financial marketplace.

Through contractual arrangements, Floyd & Associates now has approvals to jointly offer its overdraft privilege program with leagues, associations or their service firms representing 22 states. JMFA also has a business associate relationship with the Delaware Credit Union League and is a “strategic alliance provider” with CUNA and Affiliates, as well as endorsed by a leading core technologies solutions provider for credit unions.

“The public is demanding value-added services like overdraft privilege,” says CEO John M. Floyd, the originator 16 years ago of automated overdraft programs. “This discreet service avoids the embarrassment of accountholders ‘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 said. “Accountholders don’t wind up on retailer's 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, Nebraska credit unions have the opportunity to enhance member satisfaction while also increasing their non-interest fee income,” noted Dan Collins, vice president of the League and the Service firm. “Fee income has become more important to our bottom lines in an era of declining income from lending.

“We are proud to add Floyd & Associates to our select list of business partners,” Collins said. “JMFA’s portfolio of products, coupled with its competitive pricing, guaranteed regulatory compliance and well-recognized customer service, clearly made it the best choice for our credit unions and their members.

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

JMFA, founded in 1973, is a leading provider of non-interest 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:

• 2,000 to 2,500 of the 18,000 financial institutions in the United States are believed 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. The Fed has ruled that payment of an accountholder’s NSF item is not an extension of credit under the Truth in Lending Act. The Fed and other regulatory agencies, however, have proposed some changes in the way the programs are marketed, but have issued no final rules.

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. He has addressed regulators, consumer groups and financial executives, noting that some bounce or courtesy pay programs are discriminatory, over-promote the service, under-educate consumers on its use and base overdraft limits on a “mystery matrix.”

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

JMFA OVERDRAFT PRIVILEGE(SM) and PRIVILEGE MANAGER CRM™ 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.org
e-mail: [email protected]

Preston F. Kirk, APR

Kirk Public Relations

Austin, TX

830-693-4447

[email protected]

Laura Polak

Marketing Director

Nebraska Credit Union League

800-950-4455, ext. 208

[email protected]

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Preston F. Kirk, APR