The Vermont Credit Union League
Services Corporation, a subsidiary of the Vermont Credit Union League, has
signed an agreement with John M. Floyd & Associates, Inc. (JMFA) of
Houston, naming the profitability-consulting firm as its "Preferred
Business Partner" for the JMFA OVERDRAFT PRIVILEGESM program.
The League (VCUL), founded in 1947, is a statewide, full
service, financial trade association representing 37 Vermont credit
unions with 243,000 members and assets of more than $1.3 billion at the
end of 2002. Leagues in Alabama, Florida, Michigan, Mississippi, New
Jersey, New Mexico and Texas also have recently endorsed JMFA. The firm's
non-discriminatory, automated service helps members avoid added costs and
embarrassment from bounced share drafts (checks).
"The public is demanding value-added services like overdraft
privilege," CEO John M. Floyd told both the Consumer Advisory Council to
the Federal Reserve System and the Business Law Section of the American
Bar Association last spring. "This discreet service avoids the humiliation
of members 'making good' on a check with a valued retailer. Neither the
customer nor the merchant loses time or productivity in straightening out
an NSF (nonsufficient funds) mess," Floyd says. "Members don't wind up on
retailers' bad check lists.
"Vermont credit union members can avoid multiple NSF charges from
a merchant, or larger late payment penalties on house notes, car loans
and tuition payments. They also can prevent negative entries on their
credit record or potential visits from law enforcement for inadvertent --
but repeat -- bad checks or share drafts," he added. Diligent
Search...Member Friendly Program
"With overdraft privilege, credit unions have a significant
opportunity to enhance member satisfaction while increasing fee income,
which has become progressively more important in the current economy as
income from lending has fallen," explained Joseph G. Bergeron, VCUL
President.
"The VCUL diligently researched and compared suppliers and their
programs before partnering with John M. Floyd & Associates," said Bryan S.
Kent, Vice President of VCUL. "Our goal was to identify an outstanding
partner that would combine all the benefits of an overdraft program with
the credit union philosophy of focusing on the member's well being."
"I am convinced that our partnership with Floyd & Associates will
help credit unions implement a member friendly program," Bergeron added.
VCUL is a statewide trade association that assists the credit
unions in becoming the premier providers of consumer financial services.
It offers credit unions assistance in the areas of regulatory compliance,
legislative and operational information. VCUL and its support
organizations are part of an international credit union support system.
For more information, visit the League's Web site at
www.vermontcreditunions.com. Overdraft Programs Vary Widely
JMFA, founded in 1973, is a leading provider of noninterest
income products to financial institutions. The company has installed
profit improvement programs in 1600-plus financial institutions, adding
more than $5 billion in increased pre-tax earnings for its clients. The
company also has successfully implemented variations of its overdraft
privilege program in more than 400 credit unions, banks and thrifts.
"JMFA's overdraft privilege program (
www.overdraftprivilege.org) is nondiscriminatory and 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."
The Federal Reserve System, at the urging of consumer advocate
groups, including the National Consumer Law Center, has been reviewing
compliance issues concerning "bounce protection" and similar overdraft
programs. Some critics contend the programs need stricter controls under
the Truth in
Lending Act, however, the Fed decided March 28 to make no
regulatory changes at this time, but to continue gathering information on
the programs.
Floyd has been speaking from coast to coast this 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. 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," he has advised
consumers, regulators and bankers.
Brian R. Witt, chairman of the Credit Union Committee of the
American Bar Association, agreeing with Floyd's premise, stated in the May
issue of Credit Union Magazine: "The hidden, unquantifiable costs of not
covering overdrafts could be more insidious than the overdraft fees now
imposed under current disclosure laws." JMFA creates strategic programs,
including PRIVILEGE MANAGER CRM(SM), specific to each credit union, 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.