Icul Service Corp. Endorses Floyd & Associates for Overdraft Privilege Program - Automated Program Helps Members Avoid Hassle, Added Costs of Bounced Drafts (Checks)
Subsidiary of Illinois Credit Union League selects JMFA Overdraft Privilege as its preferred program for its credit union affiliates and their members. C.U. execs and consultants explain why along with the benefits of the program and the abuses endemic in poorly managed programs.
HOUSTON, TX & NAPERVILLE, IL (PRWEB) June 15, 2004 –- Illinois credit
union members who bounce share drafts (checks) can avoid embarrassment,
inconvenience and additional costs, if their credit union offers a new overdraft
privilege program endorsed by ICUL Service Corporation (LSC).
LSC, the
business subsidiary of the Illinois Credit Union League, has signed an agreement
with John M. Floyd & Associates, Inc. (JMFA) of Houston, naming the
profitability-consulting firm as its "business partner" for the JMFA OVERDRAFT
PRIVILEGESM program.
The League, formed in 1930,
represents 399 affiliated credit unions with combined assets of more than $20.8
billion and a membership of about 2.5 million. ICUL, the primary trade
association for Illinois credit unions, provides information, legislation and
education.
LSC provides products and services that
help ICUL affiliates effectively compete and prosper in the financial
marketplace. It is the largest LSC in the nation, serving nearly 700 credit
unions in 26 states. LSC operates an ATM network; mortgage banking, check
processing, and credit and debit card processing facilities; collection,
insurance and ad agencies, and a finance company through which it produces auto
loans for sale to credit unions.
Through contractual
arrangements, Floyd & Associates now has approvals to jointly offer its
overdraft privilege program with leagues, associations or their service firms
representing 21 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.
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 said. "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, Illinois credit unions have the opportunity to enhance member
satisfaction while also increasing their non-interest fee income," noted George
Fiegle, executive vice president/COO of LSC. "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 business partners," said Cathy Pettis, senior vice
president of LSC. "JMFA's portfolio of products coupled with its competitive
pricing 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," Pettis added. "I'm
convinced our relationship with Floyd will help credit unions 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 48 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:
• More than 2,000 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. 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. He 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, marketing and software
to assure successful implementation and full regulatory compliance.
JMFA
OVERDRAFT PRIVILEGE(S)M 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:
John M. Floyd, CEO, John
M. Floyd & Associates, Houston, 800-809-2307 or 281-424-3800;
Web
site:www.OverdraftPrivilege.org; e-mail, e-mail protected from spam
bots
Preston F. Kirk, APR, Kirk Public Relations, Austin TX,
830-693-4447; e-mail protected from spam bots
Cathy Pettis, SVP,
Illinois Service Corporation, Naperville, IL, 800-942-7124;
e-mail protected
from spam bots
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Source : http://www.prweb.com/releases/2004/6/prweb133676.htm