Yates: Stop Automatic Overdraft Protection

Sep 18, 2009 at 1:31 pm

State Rep. Tyrone Yates (D-Cincinnati), plans to introduce legislation in the Ohio House soon that he said would help shield bank customers from excessive fees.

Under his proposal, banks doing business in Ohio would be prohibited from automatically enrolling customers in debit card overdraft protection programs without first giving them the right to opt-out of the service.—-

During the past few years, banks have been imposing record-high fees on customers who overdraw their debit cards.  Before the penalties were enacted, banks would typically deny transactions if the cardholder didn’t have sufficient funds. Nowadays, many banks hire consultants who recommend types of new fees and penalties to help them maximize profits.

“It has come as an unfortunate surprise to many Ohioans that they are now being charged excessive fees for overdrafts,” Yates said in a prepared statement.

“It is unconscionable to charge card users as much as $35 per transaction for such a common error,” Yates added.  “In these difficult economic times, when so many people throughout the state are struggling to stay afloat, we must do all that we can to assist our citizens and ensure that they are protected in an increasingly complicated marketplace.”

Meanwhile, former Cincinnati Vice Mayor Alicia Reece recently announced she will reenter politics and run for Yates’ seat in 2010. Since losing in the 2005 mayoral primary and being forced to give up her City Council office, she has served as assistant state tourism director.

Yates, serving his fourth House term, cannot run again due to term limits.