MidSouth Bank is launching a new program that could be one of the first of its kind in the country to ease excessive overdraft fees incurred by its customers.

According to an article published in American Banker, a national banking and financial services publication, the new ombudsman program is adding the title of “account analysis counselor” to two MidSouth employees, who may provide a wide range of services including monitoring accounts and intervening on habitual overdrafters - or people who overdraw from their accounts more than six times in a 12-month period.

MidSouth President and CEO Rusty Cloutier tells American Banker that despite the program being a new initiative that other banks haven’t formalized, it’s something MidSouth has done in the past when hurricanes Katrina and Rita devastated South Louisiana.

American Banker’s Kate Davidson writes that other banks may argue that counseling customers on the most efficient bank services is not their responsibility, though the new FDIC guidelines enacted in November advise banks to “take meaningful and effective action to limit the use of overdraft programs to access short-term credit:"
The initiative could serve as a model for banks preparing for guidance from the Federal Deposit Insurance Corp. that encourages them to counsel consumers on overdrafts - though in this case the innovating bank isn’t even regulated by the FDIC; MidSouth answers to the Office of the Comptroller of the Currency.

Steven Reider, the president of Bancography, a Birmingham, Ala., bank consulting firm, said the program shows customers that the bank is more than just a vendor — it’s an advocate and advisor. MidSouth is validating customer by addressing their concerns, building loyalty in the process, he said.
American Banker also notes that many banks have rebelled against the new federal guidelines and say their clients don’t take well to the kind of guidance MidSouth is trying. Philip Smith, president of a Memphis consulting and law firm, says MidSouth is taking a large step in the right direction and described the bank initiative as being “way ahead of the curve.”

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