Iowa Ind. Bankers Endorses Floyd & Assoc. for Overdraft Privilege Program - Program Helps Consumers Avoid Hassle, Added Costs of Bounced Checks

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The Ind. Bankers Svc. Corp., the for-profit subsidiary of the Iowa Independent Bankers, has teamed with John M. Floyd & Associates of Houston (Baytown TX) to offer overdraft privilege -- "courtesy pay" to their members and those banks' accountholders to prevent the hassle, embarrassment and added costs of bounced checks.

Iowa 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 Iowa Independent Bankers (IIB).

Independent Bankers Service Corporation, the for-profit subsidiary of IIB, has signed an agreement with John M. Floyd & Associates, Inc. (JMFA) of Baytown, TX, near Houston, naming the profitability-consulting firm as its "Endorsed Provider” for the JMFA Overdraft Privilegesm program.

The statewide banking trade association, formed in 1971, represents more than 390 independently owned and operated financial institutions with combined assets of more than $44 billion. Financial organizations in about 25 states have teamed with JMFA for its “courtesy pay” product (

Discreet, Value-added Service:

According to John M. Floyd, Chairman and CEO of JMFA, “The public is demanding value-added services like overdraft privilege.” Floyd has repeatedly emphasized this in presentations to the Consumer Advisory Council to the Federal Reserve System, the American Bar Assn. and the Consumer Federation of America.

“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.

“Iowa independent banks with viable overdraft programs have the opportunity to enhance customer satisfaction while increasing their non-interest or fee income,” noted Doug Dawson, Senior Vice President of IIB Service. “Fee income has become more important to profit margins in an era of increasing complexities in banking and competition from an expanding array of industries.”

“We are proud to add Floyd & Associates to our select list of endorsed providers,” said Larry Winum, President of Glenwood State Bank and IIB. “JMFA’s portfolio of products coupled with its competitive pricing and well-recognized customer service clearly made it the best choice for our members.”

“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, Winum 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 more than 2,000 banks, thrifts and credit unions, adding billions in increased pre-tax earnings for its clients in 49 states and Central America. The company has successfully implemented variations of its overdraft privilege program in more than 900 institutions.

“JMFA Overdraft Privilege(SM) 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 2,500 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 two years. Critics contended the programs need stricter controls under the Truth in Lending Act, but the Fed stated last summer that the programs should not be covered under that Act.

Floyd has been speaking nationally this past year emphasizing the multiple benefits of overdraft programs, as well as the unfair practices endemic to the implementation, communication and management of some overdraft programs. In addition, Floyd has advised consumers, regulators and bankers that 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."

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, accountholder education and software to assure successful implementation and full regulatory compliance.

About the Iowa Independent Bankers:

The IIB is dedicated to promoting and defending the common interests of independent community banks whose services are vital to the preservation of economic diversity and rural America. Its mission is to support and secure an environment favorable to independent ownership and local control by providing high quality services and products to enhance member profits; effectively lobbying for favorable legislative and regulatory environments, and educating the public about the importance of independent banking to the social and economic well-being of the state and its residents.

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.

For More Information Or Interviews:

Jared Cahill, JMFA National Director of Alliances, John M. Floyd & Associates, Baytown, TX, 877-510-5603 or 505-228-7509;;

Doug Dawson, Senior Vice President, Independent Bankers Service Corporation, West Des Moines, IA, 515-453-1495,, OR Cathy Sue Kelly, Vice President, Iowa Independent Bankers 515- 453-1495,

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

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Preston F. Kirk, APR
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