Hawaii Credit Union League, Through HCU Services, Partners with Floyd & Associates for Overdraft Privilege Program: Program helps members avoid negative consequences of bounced share drafts (checks).
Hawaii Credit Union League and Houston-based John M. Floyd & Associates Partner to offer an overdraft privilege program to the island state's 97 credit unions and their nearly 700,000 members. Floyd comments on the benefits of the program to prevent embarassment from bounced share drafts (checks) as well as some of the abuses inherent in other programs. Financial Institutions have been eagerly adding the programs to supplement shortfals in income from lending.
HOUSTON, TX & HONOLULU, HI (PRWEB) January 28, 2004
HCU Services Corp., the business subsidiary of the Hawaii Credit Union League (HCUL), has signed an agreement with John M. Floyd & Associates, Inc. (JMFA) of Houston, naming the profitability-consulting firm as its "Preferred Business Partner" for JMFA OVERDRAFT PRIVILEGE(SM) program.
The HCUL, founded in 1937, is a statewide, full service, financial trade association representing 97 affiliated credit unions -- 100% of those in the state-- as well as two more in Guam, ranging in asset size from about $400,000 to more than $700 million. HCUL affiliates serve almost 700,000 members with total assets of approximately $5.9 billion.
Credit union leagues in Alabama, Florida, Michigan, Mississippi, New Jersey, New Mexico, Tennessee, Texas and Vermont, as well as the Credit Union League of the West (CA, NV, WA, OR) and CUNA Strategic Services, Inc.., also have teamed with JMFA during the past year for its product (www. overdraftprivilege. org).
“The public is demanding value-added services like overdraft privilege,” CEO John M. Floyd has told both the Consumer Advisory Council to the Federal Reserve System and the Consumer Federation of America. “This discreet service avoids the embarrassment of members ‘making good’ on a share draft (check) with a valued retailer. Neither the member 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.
“Members of Hawaii’s credit unions 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 repeated-- bad checks or share drafts,” he added.
Diligent SearchÂ…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 recent economy as income from lending fell,” noted Dennis Tanimoto, President and CEO of HCUL.
“HCU Services diligently researched and compared suppliers and their programs before partnering with Floyd & Associates,” said Guinevere Okimoto, V. P of HCU Services’ Member Relations Division.
“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,” she added.
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 1650-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 550 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 in March 2003 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 CRMT(TM) software, 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.
About the League:
The Hawaii Credit Union League is a statewide trade association perpetuating the philosophy of “People Helping People.” It represents its members in legislative and regulatory arenas and provides information and professional education. Its subsidiary, HCU Services is the business arm to provide products and services for Hawaii’s credit unions to compete in today’s competitive market. For more information, visit the HCUL Web site at www. hcul. org
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.
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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, John. Floyd@jmfa. com
Preston F. Kirk, APR, Kirk Public Relations, Austin TX, 830-693-4447; kirk@281.com
Kristine Blancq, Member Relations Officer, Hawaii Credit Union League, Honolulu, HI, 808- 941-0556 X239; Neighbor Island Toll Free: 888-331-JOIN (5646); kblancq@hcul. org
