Iowa's Community Bankers Endorse Floyd & Associates for Overdraft Privilege Program

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Iowa's Community Bankers (ICB) has endorsed and will co-market John M. Floyd & Associates' JMFA Overdraft Privilege program to its 15 member banks in the state, which have 340,000 accountholders and $5.9 billion in thrift assets. The nondiscriminatory, automated software program helps customers avoid embarrassment, inconvenience and added costs when they overdraw their checking accounts.

Accountholders at Iowa community banks who overdraw their accounts can avoid embarrassment, inconvenience and additional costs of bounced checks if their bank offers a John M. Floyd overdraft privilege program endorsed by Iowa’s Community Bankers (ICB). The business subsidiary of the ICB 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 program. (

Formed in 1891, the ICB represents 15 member banks with 95 locations in the state. ICB members manage thrift assets estimated at $5.9 billion, of which $5.1 billion belongs to the 340,000 accountholders. Through contractual arrangements, Floyd & Associates now has approval to jointly offer its overdraft privilege program with financial associations or their service firms. These firms are represented in 23 states, including the New Jersey and Wyoming Bankers Associations, the Independent Bankers Association of Texas and the Community Bankers Association of Oklahoma.

“The public is demanding value-added services like overdraft privilege,” says CEO John M. Floyd, who originated automated overdraft programs 16 years ago. “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. Accountholders don’t wind up on retailers’ bad check lists.

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

“With overdraft privilege, Iowa’s Community Banks have the opportunity to enhance member satisfaction while also increasing their non-interest fee income,” noted Dick Goodson, president of the Des Moines-based IACB. “Fee income has become more important to our bottom lines in an era of declining income from lending. (See photo at:

“We are proud to add Floyd & Associates to our select list of business partners,” Goodson 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 affiliated banks and their customers. Our goal was to identify an outstanding consulting vendor that would combine all the benefits of an overdraft program with the community banker philosophy of focusing on the member’s well being. “I‘m convinced our relationship with Floyd will help community bankers 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 percent 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 financial institution, 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 Iowa’s Community Bankers:

The ICB is the state trade association representing the industry, legislative and regulatory interests of its members. It provides educational, technical and informational services necessary for members to operate in a profitable and sound manner. The service subsidiary helps member banks effectively compete and prosper in the financial marketplace.

JMFA OVERDRAFT PRIVILEGES and PRIVILEGE MANAGER CRM are service marks of John M. Floyd & Associates Inc. PRIVILEGE MANAGER CRM is patent pending.


John M. Floyd, CEO

John M. Floyd & Associates, Houston

800-809-2307 or 281-424-3800

Web site:;


Dick Goodson, president

Iowa’s Community Bankers

Des Moines, IA


Preston F. Kirk, APR

Kirk Public Relations

Austin, TX


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Preston F. Kirk, APR
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