72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 528
Minority Report
B-Engrossed
Senate Bill 159
Ordered by the House May 19
Including Senate Amendments dated April 15 and House Minority
Report Amendments dated May 19
Sponsored by nonconcurring members of the House Committee on
Business, Labor and Consumer Affairs: Representatives MERKLEY,
ROSENBAUM, SCHAUFLER
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure.
Prohibits certain conduct by lender in business of making
payday loans. { + Authorizes Director of Department of Consumer
and Business Services to adopt rules to regulate payday
loans. + } Permits electronic repayment agreement. Allows
complaint to be filed with and investigated by Department of
Consumer and Business Services. Defines terms. { + Limits
interest and fees lender may charge on payday loan. Requires
lender to include notice of complaint procedure in payday loan
contract. + }
A BILL FOR AN ACT
Relating to payday loans; creating new provisions; and amending
ORS 725.600, 725.610 and 725.625.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 725.600 is amended to read:
725.600. As used in ORS 725.600 to 725.625:
(1) A lender is { + :
(a) + } 'In the business of making title loans' if at least 10
percent of all loans made by the lender are title loans.
{ + (b) 'In the business of making payday loans' if at least
10 percent of all loans made by the lender are payday 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)(a) 'Payday loan' means a loan, other than a purchase
money loan:
(A) Made primarily for personal, family or household purposes;
(B) Made for a period of 60 days or less or for which the
lender may demand repayment within 60 days; and
(C) Usually evidenced by a check or electronic repayment
agreement provided by or on behalf of the borrower.
(b) 'Payday loan' does not include a loan for a period of more
than 60 days, the repayment of which the lender may accelerate
upon a default by the borrower. + }
{ - (3) - } { + (4) + } '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 2. ORS 725.610 is amended to read:
725.610. A person may not act as an agent or facilitator for
the purpose of making a title { + or payday + } loan without
first obtaining a license under this chapter, regardless of
whether the principal making the loan is required to obtain a
license.
SECTION 3. ORS 725.625 is amended to read:
725.625. { - 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 - } { + under
ORS 183.310 to 183.550 to carry + } out the provisions of ORS
725.600 to 725.625, including but not limited to establishing
contract terms, charges and fees for title { + and payday + }
loans.
SECTION 4. { + Sections 5, 6 and 7 of this 2003 Act are added
to and made a part of ORS 725.600 to 725.625. + }
SECTION 5. { + A lender in the business of making payday loans
may not:
(1) Include in a payday 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; or
(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;
(2) Conduct a payday 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 per
loan transaction 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) Renew a payday loan more than three times; or
(5) Make a new payday loan to a consumer on the same day that a
previous payday loan expires if the lender has renewed the
previous payday loan three 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 6. { + (1) A lender in the business of making payday
loans may not charge a consumer interest or fees on a payday loan
that exceed, in the aggregate, the total of:
(a) $50; and
(b) A sum equal to 60 percent of the principal amount of the
loan multiplied by a duration factor.
(2) The lender shall calculate the duration factor by dividing
the number of days in the term of the loan by 365.
(3) If the lender extends the term of or renews a loan, the
lender may not charge additional interest or fees that exceed, in
the aggregate, 60 percent of the principal amount of the loan at
the time of extension or renewal multiplied by the duration
factor of the extension or renewal. + }
SECTION 7. { + (1) A lender in the business of making payday
loans shall include in every payday 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) A person claiming to be aggrieved by a practice that
violates section 5 of this 2003 Act, or the person's attorney,
may file with the Director of the Department of Consumer and
Business Services 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 8. Sections 5, 6 and 7 of this 2003 Act and the
amendments to ORS 725.600, 725.610 and 725.625 by sections 1, 2
and 3 of this 2003 Act apply to payday loans made on or after the
effective date of this 2003 Act.
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