Bill Text: OH HB342 | 2009-2010 | 128th General Assembly | Introduced

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Bill Title: To limit overdraft fees chargeable by financial institutions and to establish certain requirements for overdraft protection services.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2009-10-29 - To Financial Institutions, Real Estate, & Securities [HB342 Detail]

Download: Ohio-2009-HB342-Introduced.html

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As Introduced

128th General Assembly Regular Session 2009-2010

H. B. No. 342

Representative Yates 

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A BILL

To amend sections 1151.23 and 1161.29 and to enact

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sections 1109.051, 1109.052, 1151.232, 1151.233,

2

1161.291, 1161.292, 1733.245, and 1733.246 of the

3

Revised Code to limit overdraft fees chargeable by

4

financial institutions and to establish certain

5

requirements for overdraft protection services.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 1151.23 and 1161.29 be amended and	7
sections 1109.051, 1109.052, 1151.232, 1151.233, 1161.291,	8
1161.292, 1733.245, and 1733.246 of the Revised Code be enacted to	9
read as follows:	10

Sec. 1109.051.  A bank may charge an account holder a fee,	11
not to exceed five dollars per transaction, for any check or other	12
debit transaction authorized by the account holder, for which	13
there are insufficient funds in the specified account.	14

Sec. 1109.052. (A) A bank may extend secured or unsecured	15
credit in the form of overdraft privileges related to deposits	16
provided that the extension of credit complies with this section.	17

(B) No fee may be imposed for any extension of funds by a	18
bank to cover any check or other debit for which there are	19
insufficient funds in the consumer's account to pay such check or	20
other debit, unless all of the following conditions are met:	21

(1) The consumer has provided specific written consent to any	22
program or service that provides for charging of such fees in	23
connection with any such extension of funds.	24

(2) The fee is imposed pursuant to the terms of a written	25
agreement with the consumer which discloses all of the following	26
in a clear and conspicuous manner:	27

(a) The amount of any fee imposed in connection with paying	28
an overdraft;	29

(b) Any applicable disclosure required by the "Truth in	30
Lending Act," 82 Stat. 146 (1974), 15 U.S.C. 1601, et seq.;	31

(c) The categories of transactions for which a fee for	32
payment of an overdraft may be imposed, including whether an	33
overdraft created by withdrawals at automated teller machines or	34
other electronic fund transfers will be covered and a fee imposed;	35

(d) The time period by which the consumer must repay or cover	36
any extension of credit in the form of payment of an overdraft;	37

(e) The circumstances under which the bank in which an	38
account is held will not pay an overdraft;	39

(f) Any other information that the superintendent of	40
financial institutions may require by rule to be disclosed.	41

(3) The fee is separately and conspicuously disclosed, each	42
time the fee is imposed, in any periodic statement provided to the	43
consumer with respect to such account and is included in the	44
calculation of the annual percentage rate as required by the	45
"Truth in Lending Act," 82 Stat. 146 (1974), 15 U.S.C. 1606.	46

(C) The written agreement described in division (B) of this	47
section shall include a clear and conspicuous disclosure of any	48
specific circumstances under which a bank will not extend funds to	49
cover an overdraft in any transaction account of a consumer, or	50
under which the bank reserves the right to extend funds to pay any	51
such overdraft on a discretionary basis. No bank shall represent	52
that the bank will extend credit to cover all overdrafts on an	53
account.	54

Sec. 1151.23.  (A) A savings and loan association may permit	55
withdrawal of deposits upon such terms as it provides.	56

(B) A savings and loan association may permit withdrawals by	57
negotiable order of withdrawal as authorized in the "Consumer	58
Checking Account Equity Act of 1980," 94 Stat. 146, 12 U.S.C.A.	59
1832(a), and any amendments or regulations promulgated pursuant	60
thereto. An association may extend secured or unsecured credit in	61
the form of overdraft privileges related to deposits subject to	62
withdrawal under divisions (A) and (B) of this section.	63

Sec. 1151.232. A savings and loan association may charge an	64
account holder a fee, not to exceed five dollars per transaction,	65
for any check or other debit transaction authorized by the account	66
holder, for which there are insufficient funds in the specified	67
account.	68

Sec. 1151.233. (A) A savings and loan association may extend	69
secured or unsecured credit in the form of overdraft privileges	70
related to deposits provided that the extension of credit complies	71
with this section.	72

(B) No fee may be imposed for any extension of funds by the	73
association to cover any check or other debit for which there are	74
insufficient funds in the consumer's account to pay such check or	75
other debit, unless all of the following conditions are met:	76

(1) The consumer has provided specific written consent to any	77
program or service that provides for charging of such fees in	78
connection with any such extension of funds.	79

(2) The fee is imposed pursuant to the terms of a written	80
agreement with the consumer which discloses all of the following	81
in a clear and conspicuous manner:	82

(a) The amount of any fee imposed in connection with paying	83
an overdraft;	84

(b) Any applicable disclosure required by the "Truth in	85
Lending Act," 82 Stat. 146 (1974), 15 U.S.C. 1601, et seq.;	86

(c) The categories of transactions for which a fee for	87
payment of an overdraft may be imposed, including whether an	88
overdraft created by withdrawals at automated teller machines or	89
other electronic fund transfers will be covered and a fee imposed;	90

(d) The time period by which the consumer must repay or cover	91
any extension of credit in the form of payment of an overdraft;	92

(e) The circumstances under which the association in which an	93
account is held will not pay an overdraft;	94

(f) Any other information that the superintendent of	95
financial institutions may require by rule to be disclosed.	96

(3) The fee is separately and conspicuously disclosed, each	97
time the fee is imposed, in any periodic statement provided to the	98
consumer with respect to such account and is included in the	99
calculation of the annual percentage rate as required by the	100
"Truth in Lending Act," 82 Stat. 146 (1974), 15 U.S.C. 1606.	101

(C) The written agreement described in division (B) of this	102
section shall include a clear and conspicuous disclosure of any	103
specific circumstances under which an association will not extend	104
funds to cover an overdraft in any transaction account of a	105
consumer, or under which the association reserves the right to	106
extend funds to pay any such overdraft on a discretionary basis.	107
No association shall represent that the association will extend	108
credit to cover all overdrafts on an account.	109

Sec. 1161.29. (A) A savings bank may permit withdrawal of	110
deposits upon such terms as it provides.	111

(B) A savings bank may extend secured or unsecured credit in	112
the form of overdraft privileges related to deposits subject to	113
withdrawal under division (A) of this section.	114

Sec. 1161.291. A savings bank may charge an account holder a	115
fee, not to exceed five dollars per transaction, for any check or	116
other debit transaction authorized by the account holder, for	117
which there are insufficient funds in the specified account.	118

Sec. 1161.292. (A) A savings bank may extend secured or	119
unsecured credit in the form of overdraft privileges related to	120
deposits provided that the extension of credit complies with this	121
section.	122

(B) No fee may be imposed for any extension of funds by a	123
savings bank to cover any check or other debit for which there are	124
insufficient funds in the consumer's account to pay such check or	125
other debit, unless all of the following conditions are met:	126

(1) The consumer has provided specific written consent to any	127
program or service that provides for charging of such fees in	128
connection with any such extension of funds.	129

(2) The fee is imposed pursuant to the terms of a written	130
agreement with the consumer which discloses all of the following	131
in a clear and conspicuous manner:	132

(a) The amount of any fee imposed in connection with paying	133
an overdraft;	134

(b) Any applicable disclosure required by the "Truth in	135
Lending Act," 82 Stat. 146 (1974), 15 U.S.C. 1601, et seq.;	136

(c) The categories of transactions for which a fee for	137
payment of an overdraft may be imposed, including whether an	138
overdraft created by withdrawals at automated teller machines or	139
other electronic fund transfers will be covered and a fee imposed;	140

(d) The time period by which the consumer must repay or cover	141
any extension of credit in the form of payment of an overdraft;	142

(e) The circumstances under which the savings bank in which	143
an account is held will not pay an overdraft;	144

(f) Any other information that the superintendent of	145
financial institutions may require by rule to be disclosed.	146

(3) The fee is separately and conspicuously disclosed, each	147
time the fee is imposed, in any periodic statement provided to the	148
consumer with respect to such account and is included in the	149
calculation of the annual percentage rate as required by the	150
"Truth in Lending Act," 82 Stat. 146 (1974), 15 U.S.C. 1606.	151

(C) The written agreement described in division (B) of this	152
section shall include a clear and conspicuous disclosure of any	153
specific circumstances under which a savings bank will not extend	154
funds to cover an overdraft in any transaction account of a	155
consumer, or under which the savings bank reserves the right to	156
extend funds to pay any such overdraft on a discretionary basis.	157
No savings bank shall represent that the bank will extend credit	158
to cover all overdrafts on an account.	159

Sec. 1733.245. A credit union may charge an account holder a	160
fee, not to exceed five dollars per transaction, for any check or	161
other debit transaction authorized by the account holder, for	162
which there are insufficient funds in the specified account.	163

Sec. 1733.246. (A) A credit union may extend secured or	164
unsecured credit in the form of overdraft privileges related to	165
deposits provided that the extension of credit complies with this	166
section.	167

(B) No fee may be imposed for any extension of funds by a	168
credit union to cover any check or other debit for which there are	169
insufficient funds in the consumer's account to pay such check or	170
other debit, unless all of the following conditions are met:	171

(1) The consumer has provided specific written consent to any	172
program or service that provides for charging of such fees in	173
connection with any such extension of funds.	174

(2) The fee is imposed pursuant to the terms of a written	175
agreement with the consumer which discloses all of the following	176
in a clear and conspicuous manner:	177

(a) The amount of any fee imposed in connection with paying	178
an overdraft;	179

(b) Any applicable disclosure required by the "Truth in	180
Lending Act," 82 Stat. 146 (1974), 15 U.S.C. 1601, et seq.;	181

(c) The categories of transactions for which a fee for	182
payment of an overdraft may be imposed, including whether an	183
overdraft created by withdrawals at automated teller machines or	184
other electronic fund transfers will be covered and a fee imposed;	185

(d) The time period by which the consumer must repay or cover	186
any extension of credit in the form of payment of an overdraft;	187

(e) The circumstances under which the credit union in which	188
an account is held will not pay an overdraft;	189

(f) Any other information that the superintendent of	190
financial institutions may require by rule to be disclosed.	191

(3) The fee is separately and conspicuously disclosed, each	192
time the fee is imposed, in any periodic statement provided to the	193
consumer with respect to such account and is included in the	194
calculation of the annual percentage rate as required by the	195
"Truth in Lending Act," 82 Stat. 146 (1974), 15 U.S.C. 1606.	196

(C) The written agreement described in division (B) of this	197
section shall include a clear and conspicuous disclosure of any	198
specific circumstances under which the credit union will not	199
extend funds to cover an overdraft in any transaction account of a	200
consumer, or under which the credit union reserves the right to	201
extend funds to pay any such overdraft on a discretionary basis.	202
No credit union shall represent that the credit union will extend	203
credit to cover all overdrafts on an account.	204

Section 2. That existing sections 1151.23 and 1161.29 of the	205
Revised Code are hereby repealed.	206