JMFA Offers 'CPR' for Overdraft Privilege Programs

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No-obligation Compliance and Performance Review ensures consumer-friendly programs.

Banking, thrift and credit union executives, challenged to revive and refresh their overdraft programs under new federal guidelines, can get “lifeguard-worthy,” no-obligation “CPR” program from a leading consulting firm.

John M. Floyd & Associates, Inc. of Baytown, TX, (near Houston) has developed the JMFA ODP Compliance and Performance Review(SM) (CPR) program to ensure that existing overdraft privilege programs – also known as “bounce protection” or “courtesy pay” – apply Interagency regulations and industry recommendations issued earlier this year.

JMFA, which pioneered the automated, nondiscriminatory overdraft program in 1988, has implemented more than 1,000 variations of JMFA OVERDRAFT PRIVILEGE(SM). It is partnered with leading national core processors serving financial institutions. In addition, eight banking associations representing seven states and 20 credit union leagues representing 22 states have named JMFA either an “endorsed” or “preferred” provider/partner for overdraft privilege.

“We believe our customer and member-focus, our attention to regulatory compliance and our best management practices have heightened our reliability in fine-tuning any existing overdraft program under the multiple sets of new guidelines and issued regulations,” said Steve Swanston, EVP-Sales for JMFA.

“No matter how successful a financial institution's overdraft program has been, if management is not reacting to industry changes and consumer concerns, it is missing out,” Swanston emphasized. “Our no-obligation review can help financial institutions avoid compliance violations while providing a program that serves, rather than takes advantage of accountholders.

“Not only have we stayed on top of all the latest regulations from day one, JMFA also continues to guarantee 100% compliance with state and federal regulations,” he stated. “In fact, for years our company founder advocated in print and at podiums fair-practices issued by the five agencies.”

JMFA's comprehensive review assesses all aspects of compliance, including federal Regs B, E, Z, DD, Part 707 of NCUA Rules and Regulations, the FTC Act and Interagency Guidance. The firm reviews risk policies and procedures to test the overdraft program's consumer friendliness. JMFA also looks at such key performance indicators as income and charge-offs to make sure the institution reaches peak potential.

“We also assist the financial institution with technology upgrades to help streamline processes that improve efficiency and reporting,” he added. “And because personnel turnover can be an issue, JMFA provides all the products, tools and training required to update staff members responsible for communicating with accountholders and administering the overdraft program.”

The government guidance – issued by the Federal Reserve Board, Federal Deposit Insurance Corporation, National Credit Union Administration and the Office of the Comptroller of the Currency – addressed safety and soundness considerations, legal risks and best practices. The Office of Thrift Supervision issued a separate set of recommendations.

Their aim is to eliminate such abuses as discriminatory availability, over-promotion, under-education of consumers on its proper use and individual overdraft limits based on a 'mystery matrix' unknown to the accountholder. The agencies and associations want to avoid the promotion of poor account management; to provide a clear explanation of the discretionary nature of the program; to clearly disclose fees and to explain the impact of transaction-clearing policies on the overdraft fees which consumers may incur.”

Overdraft Privilege Benefits

Overdraft privilege is a discreet service that helps accountholders avoid the embarras(SM)ent of 'making good' on a check with a valued retailer or creditor. Neither the consumer nor the merchant loses time or productivity in straightening out a nonsufficient funds (NSF) situation. Accountholders avoid retailers' bad check lists and additional NSF charges from a merchant or expensive late payment penalties on installment loans.

Such programs also can prevent negative entries on their credit record or potential visits from law enforcement for inadvertent – but repeated – bad checks. Automated programs like JMFA OVERDRAFT PRIVILEGE(SM) also help identify troubled accountholders for necessary counseling. A well-managed overdraft program is a win-win-win for the consumer, the merchant and the financial institution.

JMFA, a leading provider of non-interest or fee income products to financial institutions, has installed performance improvement programs in more than 2,000 credit unions, banks and thrifts for more than 30 years, adding billions of dollars in increased pre-tax earnings for its clients in 49 states and Central America.

JMFA OVERDRAFT PRIVILEGE(SM) and JMFA ODP Compliance and Performance Review(SM) are service marks of John M. Floyd & Associates, Inc

For more information or interviews:

Steve Swanston, EVP-Sales, John M. Floyd & Associates, Baytown, TX, 800-809-2307,,

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

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Preston F. Kirk, APR
Kirk Public Relations
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