While Ohio's Going After Payday Lenders, How About BANKS?
 Thursday, June 5th, 2008

This month, Governor Ted Strickland in Ohio signed a bill that will prevent payday loan outlets from charging more than 28 percent for floating funds to Ohio residents before payday. These places typically charge $15-20 for every $100 they loan to consumers. Democrat Ted Strickland has signed the bill, House Bill 545, in hopes that it will stop the payday lending industry from trapping "consumers in a cycle of debt by providing loans with annual rates as high as 391 percent," Strickland said.

As the Cleveland Plain Dealer notes, payday outlets have been popping up all over Ohio, with more than 1,500 storefronts statewide in a decade.

It seems like every time a small business closes down, a PayDay Loan spot appears in its place.

The Bill is to go into effect in 90 days, but some payday financial institutions are planning on fighting back with a petition.

We think this is a great, great measure to help those shackled in debt from plummeting even further down. But while Gov. Strickland is at it, why not do consumers an even greater service, and crack down on Ohio banks?

Since more customers use regular commercial banks - for checkings, savings, and loans - than they do payday loan stores, it could help even more Ohioans statewide to enact legislation that would stop the banking industry from charging the excessive fees that they currently do for overdraft and negative balance fees. These fees - which suck around $33-37+ per failed transaction, on top of negative balance fees per day - are the number one source of income for Ohio banks, according to a finance manager at Fifth Third Bank. US Bank is one of the worst offenders for consumer complaints of overdraft fees. They charge $37.50 for every single transaction that attempts to post when your account is below $0 (a nightmare if you have automatic payments set up for your bills), plus $7 per day for a negative balance.

And there are other shady practices that can go along with this: for example, banks can legally hold your deposited check(s) without reason, causing your account to fall below negative even if the funds are in your account to cover it (and even if the bank shows that the funds are available!).

Banks in the US made over $50 billion in overdraft fees last year alone.

This is a chance for Ohio to continue to set an example in standing up against big money to protect the little guy.

You don't have to live in Ohio to sign...so will you join us in asking for banking CHANGE?


Ask Ohio to be a leader in reforming banking practices.

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