Payday Loan Laws

Oregon Payday Loan Laws & Legislation

Oregon Payday loan laws. Oregon Payday loan legislation. The Oregon State Legislature passed a new law in 2007 that placed a 36% APR (Annual Percentage Rate) on small consumer loans. Virtually all the Oregon payday loan brick-n-mortars closed their doors as a result.

This has had an abysmal impact on residents of Oregon who sometimes require access to small, $300 - $1000 temporary loans. See Oregon Payday Loan Consumers Suffer Without Access to Small Loans

For a thorough discussion of the payday loan industry and access to our payday loan training materials, we recommend you proceed to

If you have an interest in pursuing a payday loan business in Oregon, we suggest you concentrate your research on the Payday Loan Internet Model and the Credit Services Organization as described here. Although our discussion focuses on the Texas Credit Services Organization Model, you and your team may determine it is appropriate for a multiplicity of states.

This Credit Service Organization Model is quite new to the payday loan industry but, in the opinion of many legal minds, offers great promise.

House passes bills on payday lenders, rates Loans - Business owners say the regulations will put them out of business Wednesday, February 14, 2007

The Oregonian

SALEM -- The Oregon House on Tuesday passed four bills to regulate check cashing businesses and plug loopholes in a law that caps soaring interest rates charged by payday lenders.

"Oregon has long needed this kind of legislation to protect low-income families from predatory lending practices," said Rep. Paul Holvey, D-Eugene, chairman of the House Consumer Protection Committee that urged approval of the bills.

Payday lenders say the legislation will put them out of business. Rep. Jerry Krummel, R-Wilsonville, who led a 90-minute floor debate against the bills, argued the Legislature might as well ban payday and car-title lenders.

"We are telling a particular class of businesses that we are going to over regulate you until you go out of business because we don't have the guts to prohibit you flat out," he said.

Supporters argued check cashing businesses and short-term lenders have survived similar regulations in other states. All of the bills passed by more than a two-thirds majority and will go to the Senate, where they will be assigned to a committee. Gov. Ted Kulongoski requested the bills and says he will sign them.

House Majority Leader Dave Hunt, D-Gladstone, said the passage of the bills reflects how dramatically the political climate has changed in Salem with Democrats in control of both legislative chambers and the governor's office. Two years ago, he said, Democrats couldn't get a payday lending bill to the floor for a vote.

The new bills put a 36 percent interest rate cap on short-term car title loans and on Internet payday loans that do business in Oregon, restrict fees charged by check cashers, create an electronic tracking system for payday loan borrowers and make it difficult for short-term lenders to use a different lending license to circumvent interest rate caps.

Oregon's 360 payday loan stores make small advance loans on paychecks averaging about $300, usually for about two weeks. They commonly charge an annual interest rate of 521 percent. Car title lenders also make small, short-term loans using the title as collateral.

The law passed by the Legislature last year limits payday lenders to charging a one-time fee of $10 per $100 loaned, plus 36 percent annual interest on a maximum of two renewals or rollovers. The bills passed by the House on Tuesday would extend those same restrictions to car title lenders and Internet payday lenders. The bills would not be enacted until July 1, when the law passed last April takes effect.

Some lenders have tried to avoid interest caps by making loans under a conventional consumer license, which have no caps on interest. In an effort to close that loophole, the House passed another bill Tuesday that requires 90 percent of the loans made under a conventional license to exceed six months.

The check cashing bill would limit charges for state, federal or city checks to $5 or 2 percent of the check's value, whichever is greater. Check cashing businesses, currently unregulated, could charge 3 percent for payroll and other government checks or up to 10 percent for personal checks because of greater risk. That law would take effect Jan. 1.

Opponents said the bills overstep the role of government, give too much oversight authority to the state and restrict individual choice.

"Why are we trying to make financial decisions for people?" Krummel asked.

Supporters argued government has a role to protect consumers from usurious interest rates.

"The practice of charging an unfair or excessive amount of interest," said Rep. Suzanne Bonamici, D-Beaverton, "has been criticized, scorned and restricted on moral, ethical and legal grounds for thousands of years."

Staff writer Michelle Cole contributed to this story.