71st OREGON LEGISLATIVE ASSEMBLY--2001 Regular Session
CCA to A-Eng. SB 171 (A to RC)
LC 205-1/SB 171-A22
CONFERENCE COMMITTEE AMENDMENTS TO
A-ENGROSSED SENATE BILL 171
(INCLUDING AMENDMENTS TO RESOLVE CONFLICTS)
May 30
Amended Summary
Revises Article 9 of Uniform Commercial Code regulating secured
transactions. { + Imposes restrictions on lenders in business of
making title loans. + }
Declares emergency, effective July 1, 2001.
President Derfler:
Your Conference Committee to whom was referred A-engrossed
Senate Bill 171, having had the same under consideration,
respectfully reports it back with the recommendation that the
Senate concur in the House amendments dated March 19 and that the
bill be amended as follows and repassed.
On page 1 of the printed A-engrossed bill, line 7, after '
725.360,' insert '725.910,' and after '830.740' insert ' and
section 9, chapter __, Oregon Laws 2001 (Enrolled House Bill
2386),'.
On page 47, line 34, delete 'the following:'.
In line 35, delete '(A)'.
In line 36, after 'U.S.C.' delete the rest of the line and line
37 and insert '104(a)(2), provided that such transaction
constitutes a sale of such claim or right. The limitation in this
paragraph is intended to leave to the court the determination of
the proper rules in such cases. The court may not infer from that
limitation the nature of the proper rule in such cases and may
continue to apply established approaches.
' (c) Subsections (4) and (6) of this section do not apply to
the following:
' (A) The assignment or transfer of, or the creation of a
security interest in, a claim or right to receive compensation
for injuries or sickness as described in 26 U.S.C. 104(a)(1);'.
In line 44, delete '(c)' and insert '(d)'.
On page 49, line 41, delete 'the following:'.
In line 42, delete '(A)'.
In line 43, after 'U.S.C.' delete the rest of the line and line
44 and insert '104(a)(2), provided that such transaction
constitutes a sale of such claim or right. The limitation in this
paragraph is intended to leave to the court the determination of
the proper rules in such cases. The court may not infer from that
limitation the nature of the proper rule in such cases and may
continue to apply established approaches.
' (b) Subsections (1) and (3) of this section do not apply to
the following:
' (A) The assignment or transfer of, or the creation of a
security interest in, a claim or right to receive compensation
for injuries or sickness as described in 26 U.S.C. 104(a)(1);'.
On page 50, line 6, delete '(b)' and insert '(c)'.
On page 105, after line 6, insert:
' { + SECTION 159a. + } { + If House Bill 2386 becomes law,
section 159 of this 2001 Act (amending ORS 29.205) is repealed
and section 9, chapter ___, Oregon Laws 2001 (Enrolled House Bill
2386), is amended to read: + }
' { + Sec. 9. + } (1) Notwithstanding section 7 { + , chapter
___, Oregon Laws 2001 (Enrolled House Bill 2386) + } { - of
this 2001 Act - } , a garnishee may apply a setoff against
amounts owing to the debtor under the terms of a land sale
contract, under the terms of a promissory note or other evidence
of indebtedness that is secured by a mortgage or trust deed, or
under the terms of a security agreement as defined in { - ORS
79.1050 - } { + section 2 of this 2001 Act + }, to the extent
that those amounts are actually paid to another person:
' (a) Who is entitled to receive the amounts under the terms of
the land sale contract, mortgage, trust deed or security
agreement, or under the terms of any other land sale contract,
mortgage, trust deed or security agreement that is secured by the
same property that is the subject of the land sale contract,
mortgage, trust deed or security agreement; and
' (b) Who has an interest in the property that is the subject
of the land sale contract, mortgage, trust deed or security
agreement that is superior to the interest of the creditor under
the laws that would govern a foreclosure, trust deed sale,
repossession or other action against the property that is the
subject of the land sale contract, mortgage, trust deed or
security agreement.
' (2) A garnishee must deliver in the manner required by
sections 1 to 65 { + , chapter ___, Oregon Laws 2001 (Enrolled
House Bill 2386), + } { - of this 2001 Act - } all amounts in
the garnishee's possession, control or custody at the time of
delivery of the writ of garnishment that are not actually paid by
the garnishee to another person as described in subsection (1) of
this section, unless those amounts are exempt from execution
under other law.
' (3) A garnishee who applies a setoff under this section must
disclose that the setoff has been applied, and the amount of the
setoff, in the garnishee response required by section 24 { + ,
chapter ___, Oregon Laws 2001 (Enrolled House Bill 2386) + }
{ - of this 2001 Act - } . The garnishee must certify in the
garnishee response that the amounts specified in the certificate
were actually paid by the garnishee to another person entitled to
receive those amounts under subsection (1) of this section.
' { + SECTION 159b. + } { + The repeal of section 159 of
this 2001 Act and the amendments to section 9, chapter ___,
Oregon Laws 2001 (Enrolled House Bill 2386), by section 159a of
this 2001 Act become operative on the effective date of chapter
___, Oregon Laws 2001 (Enrolled House Bill 2386). + } ' .
On page 133, after line 3, insert:
'
{ + TITLE LOANS + }
' { + SECTION 196. + } { + Sections 197 to 202 of this 2001
Act are added to and made a part of ORS chapter 725. + }
' { + SECTION 197. + } { + As used in sections 197 to 202 of
this 2001 Act:
' (1) A lender is 'in the business of making title loans' if at
least 10 percent of all loans made by the lender are title loans.
' (2) 'Lender' includes individuals, corporations,
associations, firms, partnerships, limited liability companies
and joint stock companies. 'Lender' does not include a financial
institution or trust company, as those terms are defined in ORS
706.008.
' (3) 'Title loan' means a loan, other than a purchase money
loan:
' (a)(A) Secured by the title to a motor vehicle, recreational
vehicle, boat or mobile home;
' (B) Made for a period of 60 days or less;
' (C) With a single payment payback; and
' (D) Made by a lender in the business of making title loans;
or
' (b) That is secured, substantially equivalent to a title loan
as defined in paragraph (a) of this subsection, and designated as
a title loan by rule or order of the Director of the Department
of Consumer and Business Services. + }
' { + SECTION 198. + } { + A lender may not make a title
loan to a consumer without forming a good faith belief that the
consumer has the ability to repay the title loan. In forming a
good faith belief, the lender shall consider factors adopted by
the Director of the Department of Consumer and Business Services
by rule. A lender that meets conditions adopted by the director
by rule shall be deemed to be in compliance with this
section. + }
' { + SECTION 199. + } { + A lender in the business of
making title loans may not:
' (1) Include any of the following provisions in a title loan
contract:
' (a) A hold-harmless clause;
' (b) A confession of judgment or other waiver of the right to
notice and the opportunity to be heard in an action;
' (c) An agreement by the consumer not to assert any claim or
defense arising out of the contract against the lender or any
holder in due course;
' (d) An executory waiver or a limitation of exemption from
attachment, execution or other process on real or personal
property held by, owned by or due to the consumer, unless the
waiver or limitation applies only to property subject to a
security interest executed in connection with the loan; or
' (e) A clause permitting the continuation of interest after
repossession of the consumer's motor vehicle, recreational
vehicle, boat or mobile home;
' (2) Conduct a title loan business where liquor or lottery
tickets are sold or where gambling devices are located;
' (3) Charge the consumer more than one fee under ORS 30.701
for dishonored checks when the consumer issues more than one
check to the lender. However, the lender may recover from the
consumer any fee charged to the lender by an unaffiliated
financial institution for each dishonored check;
' (4) Require or accept from a consumer a set of keys to the
motor vehicle, recreational vehicle, boat or mobile home whose
title secures the title loan;
' (5) Make more than one outstanding loan that is secured by
one title;
' (6) Renew a loan that is secured by one title more than six
times after the loan is first made; or
' (7) Make a new loan, secured by a title, to a consumer on the
same day that a previous loan, secured by the same title, expires
if the lender has renewed the previous loan six times. The lender
shall wait at least until the next day after the expiration date
of the previous loan before making the new loan to the
consumer. + }
' { + SECTION 200. + } { + A person may not act as an agent
or facilitator for the purpose of making a title loan without
first obtaining a license under this chapter, regardless of
whether the principal making the loan is required to obtain a
license. + }
' { + SECTION 201. + } { + (1) A lender in the business of
making title loans shall include in every title loan contract a
notice, printed in type size equal to at least 12-point type,
stating that the consumer or the consumer's attorney may file a
complaint with the Director of the Department of Consumer and
Business Services as provided in this section.
' (2) Any person claiming to be aggrieved by a practice that
violates a provision of section 198, 199 or 200 of this 2001 Act
or any rule adopted under section 202 of this 2001 Act, or the
person's attorney, may file with the director a verified
complaint in writing. The person shall state in the complaint the
name and address of the lender alleged to have committed the
unlawful practice and the particulars of the alleged unlawful
practice. The director may require the person to set forth in the
complaint other information that the director considers
pertinent. The person may file the complaint no later than one
year after the alleged unlawful practice.
' (3) After the filing of a complaint under this section, the
director may cause an investigation to be made under ORS
725.310. + }
' { + SECTION 202. + } { + In accordance with ORS 183.310 to
183.550, the Director of the Department of Consumer and Business
Services may adopt rules for the purpose of carrying out the
provisions of sections 197 to 202 of this 2001 Act, including but
not limited to establishing contract terms, charges and fees for
title loans. + }
' { + SECTION 203. + } ORS 725.910 is amended to read:
' 725.910. (1) The Director of the Department of Consumer and
Business Services may assess { + against + } any person who
violates any provision of this chapter { + , + } or any rule or
final order of the director under this chapter, a civil penalty
in an amount determined by the director of not more than $2,500.
In addition, if a licensee commits such a violation, the director
may revoke the license of the licensee.
' (2) Civil penalties under this section shall be imposed as
provided in ORS 183.090.
' (3) { + Except as provided in subsection (4) of this
section, + } all moneys collected under this section shall be
paid to the State Treasurer and credited as provided in ORS
705.145.
' { + (4) In addition to any other penalty provided by law,
the director may assess against any person who lends money
without the license required under this chapter a civil penalty
in an amount equal to the interest received that exceeds nine
percent per annum. The director shall pay all moneys collected
under this subsection to the Division of State Lands for the
benefit of the Common School Fund. + } ' .
In line 7, delete '196' and insert '204'.
In line 13, delete '197' and insert '205'.
/sJohn Minnis
Senator
/sGinny Burdick
Senator
/sRoger Beyer (Excused)
Senator
/sMax Williams
Representative
/sKathy Lowe
Representative
/sLane Shetterly
Representative
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