Chapter 603
AN ACT
HB 2871
Relating to consumer loans; creating new provisions; amending ORS
725.010, 725.045, 725.340, 725.345, 725.347, 725.505, 725.610, 725.615, 725.620
and 725.622; repealing ORS 725.625 and section 4, chapter 3, Oregon Laws 2006;
and declaring an emergency.
Be It Enacted by the People of
the State of
SECTION 1. ORS 725.010 is amended to read:
725.010. As used in this
chapter:
[(1) “Department” means the Department of Consumer and Business
Services.]
(1)(a) “Broker or
facilitator” means a person that conducts a business in which, for a fee or
consideration, the person:
(A) Processes, receives
or accepts for delivery to a lender an application for a loan, individually or
in conjunction or cooperation with another person;
(B) Accepts and delivers
to a lender all or most of the proceeds of a payment made in connection with a
loan; or
(C) Assists in making a
loan in a material capacity other than as a lender.
(b) “Broker or
facilitator” does not include a mortgage broker or loan originator, as those
terms are defined in ORS 59.840, or an employee of a licensee.
(2) “Consumer finance
loan” means a loan or line of credit that is unsecured or secured by personal
or real property and that has periodic payments and terms longer than 60 days.
[(2) “Director” means the Director of the Department of Consumer and
Business Services.]
(3) “Licensee” means [every] a person licensed under
this chapter.
SECTION 2. ORS 725.045 is amended to read:
725.045. (1) [No person, without first obtaining a license
under this chapter, shall make a consumer loan of $50,000 or less, except as
provided under ORS 82.010, 82.020 and 82.025.] Without first obtaining a
license under this chapter, a person may not conduct a business in which the
person makes a loan described in subsection (2) of this section or acts as an
agent, broker or facilitator for a person that makes a loan described in
subsection (2) of this section, except as provided under ORS 82.010, 82.020 and
82.025.
(2) This section applies
to loans of $50,000 or less that are:
(a) Payday loans, as
defined in ORS 725.600;
(b) Title loans, as
defined in ORS 725.600; or
(c) Consumer finance
loans.
(3) This section does
not apply to a person that does not collect a fee or consideration in
connection with a loan described in subsection (2) of this section or an
application for a loan described in subsection (2) of this section and that:
(a) Does not interact
directly with a borrower or consumer;
(b) Acts solely as an
intermediary between the borrower or consumer and a lender or a person that
conducts business as a broker or facilitator for a loan described in subsection
(2) of this section;
(c) Transmits
information, electronically or otherwise, concerning the borrower or consumer
to a lender or a person that conducts business as a broker or facilitator for a
loan described in subsection (2) of this section; or
(d) Prepares, issues or
delivers a negotiable instrument to a lender or a person that conducts business
as a broker or facilitator for a loan described in subsection (2) of this
section for subsequent delivery to a borrower or consumer.
SECTION 3. ORS 725.340, as amended by section 2, chapter
3, Oregon Laws 2006, is amended to read:
725.340. [(1) Except as provided in ORS 725.622, a
licensee may charge, contract for and receive any interest or consideration for
loans, secured or unsecured, as agreed upon by the licensee and the borrower.]
(1) Except as
provided in ORS 725.615 and 725.622, a licensee may:
(a) Charge, contract for
and receive in connection with a consumer finance loan made in accordance with
this chapter a finance charge that, when expressed as an annual percentage
rate, does not exceed the greater of:
(A) 36 percent; or
(B) 30 percentage points
in excess of the discount rate on 90-day commercial paper in effect at the
Federal Reserve Bank of
(b) Contract for and
receive in connection with a consumer finance loan made in accordance with this
chapter, and in addition to the finance charge described in paragraph (a) of
this subsection, other reasonable and bona fide fees, expenses or damages,
subject to oversight and regulation by the Department of Consumer and Business
Services. For purposes of this paragraph, “fees, expenses or damages” includes,
but is not limited to:
(A) Items exempted from
the computation of the finance charge in accordance with the Truth in Lending
Act, 15 U.S.C. 1605(d) and (e), as that Act existed on the effective date of
this 2007 Act, and similar pass-through fees or charges;
(B) Prepayment fees and
late fees;
(C) Fees and damages in
accordance with ORS 30.701;
(D) Actual expenses the
licensee reasonably incurs in collecting a consumer finance loan that the
borrower or consumer has failed to repay according to the terms of the consumer
finance loan contract; and
(E) Amounts associated
with the collection of a defaulted loan that are authorized by statute or
awarded by a court of law.
(c) For purposes of this
subsection, “finance charge” and “annual percentage rate” have the meanings
given those terms in the federal Truth in Lending Act, 15
U.S.C. 1601 et seq.
(2) When a precomputed
loan contract is originally scheduled to be repaid in 62 months or less and
requires repayment in substantially equal or consecutive monthly installments
of principal and interest combined, the interest or consideration may be
precomputed, contracted for and earned on scheduled unpaid principal balances
on the assumption that all scheduled payments will be made when due. In such
cases, every payment may be applied to the combined total of principal and
precomputed interest until the contract is fully paid, and the acceptance or
payment of interest or consideration on any loan made under the provisions of
this subsection is not considered to constitute payment, deduction or receipt thereof
in advance. The precomputed interest or consideration is subject to the
following adjustments:
(a) When a default of
more than 10 days in the payment of any scheduled installment occurs, the
licensee may charge and collect a default charge not exceeding five percent of
the unpaid amount of the installment or $5, whichever is less.
A default charge may be collected only once on an installment, but may be
collected at the time it accrues or at any time thereafter. A default charge
may not be assessed with respect to an installment which is paid in full on or
within 10 days after a scheduled installment due date when an earlier maturing
installment or a default or deferral charge on an earlier maturing installment
may not have been paid in full even though all or part of such installment
payment is applied to an earlier maturing installment, or a default or deferral
charge.
(b) If the payment of
all unpaid installments is deferred one or more full months, and if the
contract so provides, the licensee may charge and collect a deferral charge not
exceeding the annual percentage rate specified in subsection (1)(a) of this section and previously disclosed to the
borrower pursuant to the [Federal
Consumer Credit Protection (Truth-in-Lending) Act] federal Truth in
Lending Act applied to the sum of the installments deferred for the length
of the deferral period. The deferral period is that period in which no
scheduled installment is required to be paid by reason of the deferral. The
charge may be collected at the time of deferral or at any time thereafter. A
deferral charge may not be made for the deferral of any installment with
respect to which a default charge has been collected, unless the default charge
is deducted from the deferral charge. If prepayment of the loan in full occurs
during the deferral period, in addition to any other rebate which may be
required, the borrower shall receive a rebate of the portion of the deferral
applicable to the unexpired months in the deferral period, for which purpose a
fraction of an unexpired month exceeding 15 days is considered to be a month.
(c) Upon prepayment in
full of the unpaid balance of a precomputed loan, a rebate of unearned interest
or consideration shall be made as provided in this paragraph. The amount of the
rebate shall be not less than the total interest contracted for to maturity,
less the greater of:
(A) Ten percent of the
amount financed or $75, whichever is less; or
(B) The interest or
consideration earned to the installment due date nearest the date of
prepayment, computed by applying the simple interest rate of the loan to the
actual principal balances outstanding, for the periods of time the balances
were actually outstanding. For purposes of rebate
computations under this subparagraph, the installment due date preceding the
date of prepayment is considered to be nearest if prepayment occurs 15 days or
less after that installment date. If prepayment occurs more than 15 days
after the preceding installment due date, the next succeeding installment due
date is considered to be nearest to the date of prepayment. In determining the
simple interest rate, the licensee may apply to the scheduled payments the
actuarial method, by which each scheduled payment is applied first to accrued
and unpaid interest or consideration, and any amount remaining is applied to
reduction of the principal balance.
(3) If the borrower
agrees to perform certain duties to insure or preserve the collateral and fails
to perform those duties, the licensee may pay for the performance of those
duties and add the amounts paid to the unpaid principal balance. A charge may
be made for sums advanced, at the rate provided for in the loan agreement.
(4) The loan contract
may provide that after default and referral the borrower shall pay the licensee
for reasonable attorney fees actually paid by the licensee to an attorney not a
salaried employee of the licensee.
SECTION 3a. If House Bill 2204 becomes law, section 3
of this 2007 Act (amending ORS 725.340) is repealed and ORS 725.340, as amended
by section 2, chapter 3, Oregon Laws 2006, and section 3, chapter 473, Oregon
Laws 2007 (Enrolled House Bill 2204), is amended to read:
725.340. [(1) Except as provided in ORS 725.615 and
725.622, a licensee may charge, contract for and receive any interest or
consideration for loans, secured or unsecured, as agreed upon by the licensee
and the borrower.]
(1) Except as
provided in ORS 725.615 and 725.622, a licensee may:
(a) Charge, contract for
and receive in connection with a consumer finance loan made in accordance with
this chapter a finance charge that, when expressed as an annual percentage
rate, does not exceed the greater of:
(A) 36 percent; or
(B) 30 percentage points
in excess of the discount rate on 90-day commercial paper in effect at the
Federal Reserve Bank of
(b) Contract for and
receive in connection with a consumer finance loan made in accordance with this
chapter, and in addition to the finance charge described in paragraph (a) of
this subsection, other reasonable and bona fide fees, expenses or damages,
subject to oversight and regulation by the Department of Consumer and Business
Services. For purposes of this paragraph, “fees, expenses or damages” includes,
but is not limited to:
(A) Items exempted from
the computation of the finance charge in accordance with the Truth in Lending
Act, 15 U.S.C. 1605(d) and (e), as that Act existed on the effective date of
this 2007 Act, and similar pass-through fees or charges;
(B) Prepayment fees and
late fees;
(C) Fees and damages in
accordance with ORS 30.701;
(D) Actual expenses the
licensee reasonably incurs in collecting a consumer finance loan that the
borrower or consumer has failed to repay according to the terms of the consumer
finance loan contract; and
(E) Amounts associated
with the collection of a defaulted loan that are authorized by statute or
awarded by a court of law.
(c) For purposes of this
subsection, “finance charge” and “annual percentage rate” have the meanings
given those terms in the federal Truth in Lending Act, 15
U.S.C. 1601 et seq.
(2) When a precomputed
loan contract is originally scheduled to be repaid in 62 months or less and
requires repayment in substantially equal or consecutive monthly installments
of principal and interest combined, the interest or consideration may be
precomputed, contracted for and earned on scheduled unpaid principal balances
on the assumption that all scheduled payments will be made when due. In such
cases, every payment may be applied to the combined total of principal and
precomputed interest until the contract is fully paid, and the acceptance or
payment of interest or consideration on any loan made under the provisions of
this subsection is not considered to constitute payment, deduction or receipt
thereof in advance. The precomputed interest or consideration is subject to the
following adjustments:
(a) When a default of
more than 10 days in the payment of any scheduled installment occurs, the
licensee may charge and collect a default charge not exceeding five percent of
the unpaid amount of the installment or $5, whichever is less.
A default charge may be collected only once on an installment, but may be
collected at the time it accrues or at any time thereafter. A default charge
may not be assessed with respect to an installment which is paid in full on or
within 10 days after a scheduled installment due date when an earlier maturing
installment or a default or deferral charge on an earlier maturing installment
may not have been paid in full even though all or part of such installment
payment is applied to an earlier maturing installment, or a default or deferral
charge.
(b) If the payment of
all unpaid installments is deferred one or more full months, and if the
contract so provides, the licensee may charge and collect a deferral charge not
exceeding the annual percentage rate specified in subsection (1)(a) of this section and previously disclosed to the
borrower pursuant to the [Federal
Consumer Credit Protection (Truth-in-Lending) Act] federal Truth in
Lending Act applied to the sum of the installments deferred for the length
of the deferral period. The deferral period is that period in which no
scheduled installment is required to be paid by reason of the deferral. The
charge may be collected at the time of deferral or at any time thereafter. A
deferral charge may not be made for the deferral of any installment with
respect to which a default charge has been collected, unless the default charge
is deducted from the deferral charge. If prepayment of the loan in full occurs
during the deferral period, in addition to any other rebate which may be
required, the borrower shall receive a rebate of the portion of the deferral
applicable to the unexpired months in the deferral period, for which purpose a
fraction of an unexpired month exceeding 15 days is considered to be a month.
(c) Upon prepayment in
full of the unpaid balance of a precomputed loan, a rebate of unearned interest
or consideration shall be made as provided in this paragraph. The amount of the
rebate shall be not less than the total interest contracted for to maturity,
less the greater of:
(A) Ten percent of the
amount financed or $75, whichever is less; or
(B) The interest or
consideration earned to the installment due date nearest the date of
prepayment, computed by applying the simple interest rate of the loan to the
actual principal balances outstanding, for the periods of time the balances
were actually outstanding. For purposes of rebate
computations under this subparagraph, the installment due date preceding the
date of prepayment is considered to be nearest if prepayment occurs 15 days or
less after that installment date. If prepayment occurs more than 15 days
after the preceding installment due date, the next succeeding installment due
date is considered to be nearest to the date of prepayment. In determining the
simple interest rate, the licensee may apply to the scheduled payments the
actuarial method, by which each scheduled payment is applied first to accrued
and unpaid interest or consideration, and any amount remaining is applied to
reduction of the principal balance.
(3) If the borrower
agrees to perform certain duties to insure or preserve the collateral and fails
to perform those duties, the licensee may pay for the performance of those
duties and add the amounts paid to the unpaid principal balance. A charge may
be made for sums advanced, at the rate provided for in the loan agreement.
(4) The loan contract
may provide that after default and referral the borrower shall pay the licensee
for reasonable attorney fees actually paid by the licensee to an attorney not a
salaried employee of the licensee.
SECTION 4. ORS 725.345 is amended to read:
725.345. (1) As used in
this section and ORS 725.347, “open-end loan plan” means a plan or arrangement,
the agreement for which expressly states that it is made pursuant to this
section under which loans are made, and under which:
(a) The licensee may
permit the borrower to obtain advances of money from the licensee from time to
time or the licensee may advance money on behalf of the borrower from time to
time as directed by the borrower;
(b) The unpaid principal
balances and interest or consideration are debited to an account;
(c) Interest or
consideration is calculated on the unpaid principal balance in the borrower’s
account from time to time, which balance may include all advances made on
behalf of the borrower and all charges authorized under ORS 725.340 and this
section; and
(d) The borrower has the
privilege of paying the unpaid balance in full or in installments.
(2) A licensee may make
loans under an open-end loan plan and may contract for and receive interest or
consideration only as provided in ORS 725.340.
[(3) In addition to the interest or consideration permitted under ORS
725.340, a licensee may contract for and receive on any loan such additional
charges as may be agreed upon by the licensee and the borrower.]
[(4)] (3) A security interest in
real or personal property may be taken to secure an open-end loan plan.
Any security interest in real or personal property shall be promptly released if
there has been no outstanding balance for 12 months and the borrower either
does not have or surrenders the unilateral right to create a new outstanding
balance or if the account is terminated at the borrower’s request and paid in
full.
[(5)] (4) ORS 725.050 (2), 725.340 (2) and 725.360 (1), (2)
and (4) do not apply to any open-end loan plan.
[(6)] (5) The open-end loan plan agreement shall contain the
name and address of the borrower and of the licensee and shall disclose the
date of the agreement, the method of determining the minimum periodic payments
which will be required to pay the initial and any subsequent advances, the
conditions under which interest or consideration may be imposed, the method of
determining the principal balance upon which interest or consideration may be
imposed, the method of determining the amount of the interest or consideration,
each periodic rate and the range of balances to which each rate is applicable
and the corresponding annual percentage rate in accordance with Regulation Z
promulgated by the Board of Governors of the Federal Reserve System under
section 105 of the Consumer Credit Protection Act (15 U.S.C. 1604), and the
nature of the security taken.
[(7)] (6) Except for an account which the licensee deems to
be uncollectible or with respect to which delinquency collection procedures
have been instituted, the licensee shall deliver or cause to be delivered to
the borrower, for each billing cycle at the end of which there is an unpaid
balance of more than $1 in the account or with respect to which interest or
consideration is imposed, a statement setting forth the outstanding balance in
the account at the beginning of the billing cycle, the nature, date and amount
of any subsequent advance during the cycle, the amounts and dates of payments
credited to the account during the billing cycle, the amount of any interest or
consideration debited to the account during the billing cycle, each periodic
rate and the range of balances to which each rate is applicable and the corresponding
annual percentage rate in accordance with Regulation Z promulgated by the Board
of Governors of the Federal Reserve System under section 105 of the Consumer
Credit Protection Act (15 U.S.C. 1604), the balance on which the interest or
consideration was calculated, a statement of how that balance was determined,
the closing date of the billing cycle, the outstanding balance on that closing
date and the minimum monthly payment required.
SECTION 5. ORS 725.347 is amended to read:
725.347. (1) As used in this section, “open-end credit card plan” means
an open-end loan plan under which:
(a) The licensee issues
one or more cards, checks, letters of credit or other devices to the borrower;
and
(b) The borrower may
obtain advances from the licensee, either directly or in connection with
purchases of goods and services, by using the card, check, letter of credit or
other device.
(2) A licensee may
transact business and extend credit to borrowers under an open-end credit card
plan. A licensee may offer an open-end credit card plan in conjunction with
noncredit features or services available to the borrower through use of the
card or other device. The noncredit features or services shall not be subject
to regulation under this chapter.
(3) The agreement between
the licensee and the borrower relating to the open-end credit card plan shall
conform to the requirements of ORS 725.345 [(6)]
(5), except that the borrower’s name and address and the date of the
agreement need not be included in the agreement if the borrower has submitted a
signed and dated application to the licensee seeking the issuance of one or
more cards or other devices.
SECTION 6. ORS 725.505 is amended to read:
725.505. (1) In
accordance with ORS chapter 183, the Director of the Department of Consumer and
Business Services may adopt rules for the [purpose
of carrying out this chapter.] purposes of protecting borrowers and
consumers, providing clarity to licensees and lenders and otherwise carrying
out and enforcing this chapter. The rules may include, but are not limited to,
provisions that establish loan forms, terms, charges and fees.
(2) In addition to the
notice requirements of ORS chapter 183, before the director adopts a rule, the
director shall submit a copy of the rule to each licensee.
SECTION 6a. If House Bill 2205 becomes law, section 6
of this 2007 Act (amending ORS 725.505) is repealed and ORS 725.505, as amended
by section 8, chapter [In committee upon adjournment],
725.505. (1) In
accordance with ORS chapter 183, the Director of the Department of Consumer and
Business Services may adopt rules [to
implement, administer and enforce this chapter and to regulate lending terms
and practices, consistent with this chapter, for the protection of the public]
for the purposes of protecting borrowers and consumers, providing clarity to
licensees and lenders and otherwise carrying out and enforcing this chapter.
The rules may include, but are not limited to, provisions that establish loan
forms, terms, charges and fees.
(2) In addition to the
notice requirements of ORS chapter 183, before the director adopts a rule, the
director shall submit a copy of the rule to each licensee.
SECTION 7. ORS 725.610 is amended to read:
725.610. A person may
not act as an agent, broker 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 8. ORS 725.615 is amended to read:
725.615. (1) A lender in the business of making title loans may not:
(a) Make or renew a
title loan at a rate of interest that exceeds 36 percent per annum, excluding a
one-time origination fee for a new loan;
(b) Charge during the
term of a new title loan, including all renewals of the loan, more than one
origination fee of $10 per $100 of the loan amount or $30, whichever is less;
(c) Make or renew a
title loan for a term of less than 31 days;
(d) Charge a consumer
any fee or interest other than a fee or interest described in paragraph (a) or
(b) of this subsection or in subsection (2) of this section;
[(1)] (e) Include any of the following provisions in a title
loan contract:
[(a)] (A) A hold-harmless clause;
[(b)] (B) A confession of judgment
or other waiver of the right to notice and the opportunity to be heard in an
action;
[(c)] (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)] (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)] (E) A clause permitting the continuation of interest
after repossession of the consumer’s motor vehicle, recreational vehicle, boat
or mobile home;
[(2)] (f) 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)] (g) 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)] (h) Make more than one outstanding loan that is secured
by one title;
[(6)] (i) Renew [a]
an existing loan that is secured by one title more than [six] two 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.]
(j) Make a new title
loan to a consumer within seven days of the date on which a previous title loan
expires.
(2)(a) A lender in the
business of making title loans may not charge the consumer more than one fee per
loan transaction for dishonored checks or insufficient funds, regardless of how
many checks or debit agreements the lender obtains from the consumer for the
transaction. The fee may not exceed $20.
(b) A lender in the
business of making title loans may not collect a fee for a dishonored check
under ORS 30.701 or seek or recover statutory damages and attorney fees from a
consumer for a dishonored check under ORS 30.701. The lender may recover from
the consumer any fee charged to the lender by an unaffiliated financial
institution for each dishonored check. For a dishonored check or insufficient
funds, the fees described in this subsection are the only remedy a lender may
pursue and the only fees a lender may charge.
(3) The provisions of
ORS 725.600 to 725.625 do not prevent a lender from recovering amounts
associated with the collection of a defaulted loan that are authorized by
statute or awarded by a court of law.
SECTION 8a. If House Bill 2203 becomes law and House
Bill 2204 does not become law, section 8 of this 2007 Act (amending ORS
725.615) is repealed and ORS 725.615, as amended by section 2, chapter 472,
Oregon Laws 2007 (Enrolled House Bill 2203), is amended to read:
725.615. (1) A lender in the business of making title loans may not:
(a) Make or renew a
title loan at a rate of interest that exceeds 36 percent per annum, excluding a
one-time origination fee for a new loan;
(b) Charge during the
term of a new title loan, including all renewals of the loan, more than one
origination fee of $10 per $100 of the loan amount or $30, whichever is less;
(c) Make or renew a
title loan for a term of less than 31 days;
(d) Charge a consumer
any fee or interest other than a fee or interest described in paragraph (a),
(b) or (e) of this subsection or in subsection (2) of this section;
(e) Charge the consumer
more than the actual amount that the vendor or service provider charges the
lender for access to or use of the system described in section 5, chapter 472,
Oregon Laws 2007 (Enrolled House Bill 2203);
[(a)] (f) 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;
[(b)] (g) Conduct a title loan
business where liquor or lottery tickets are sold or where gambling devices are
located;
[(c) 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;]
[(d) Charge the consumer more than the actual amount that the vendor or
service provider charges the lender for access to or use of the system
described in section 5 of this 2007 Act;]
[(e)] (h) 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;
[(f)] (i) Make more than one
outstanding loan that is secured by one title;
[(g)] (j) Renew [a]
an existing loan that is secured by one title more than [six] two times after the loan is
first made; or
[(h) 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.]
(k) Make a new title
loan to a consumer within seven days of the date on which a previous title loan
expires.
(2)(a) A lender in the
business of making title loans may not charge the consumer more than one fee
per loan transaction for dishonored checks or insufficient funds, regardless of
how many checks or debit agreements the lender obtains from the consumer for
the transaction. The fee may not exceed $20.
(b) A lender in the
business of making title loans may not collect a fee for a dishonored check
under ORS 30.701 or seek or recover statutory damages and attorney fees from a
consumer for a dishonored check under ORS 30.701. The lender may recover from
the consumer any fee charged to the lender by an unaffiliated financial
institution for each dishonored check. For a dishonored check or insufficient
funds, the fees described in this subsection are the only remedy a lender may
pursue and the only fees a lender may charge.
[(2)] (3) The provisions of ORS 725.600 to 725.625 do not
prevent a lender from recovering amounts associated with the collection of a
defaulted loan that are authorized by statute or awarded by a court of law.
SECTION 8b. If House Bill 2204 becomes law and House
Bill 2203 does not become law, section 8 of this 2007 Act (amending ORS
725.615) is repealed and ORS 725.615, as amended by section 2, chapter 473,
Oregon Laws 2007 (Enrolled House Bill 2204), is amended to read:
725.615. (1) A lender in the business of making title loans may not:
(a) Make or renew a
title loan at a rate of interest that exceeds 36 percent per annum, excluding a
one-time origination fee for a new loan;
[(b) Charge an origination fee for a new title loan of more than $10 for
each $100 of the amount of the loan;]
(b) Charge during the
term of a new title loan, including all renewals of the loan, more than one
origination fee of $10 per $100 of the loan amount or $30, whichever is less;
(c) Make or renew a
title loan for a term of less than 31 days;
(d) Charge a consumer
any fee or interest other than a fee or interest described in paragraph (a) or
(b) of this subsection or in subsection (2) of this section;
(e) 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;
(f) Conduct a title loan
business where liquor or lottery tickets are sold or where gambling devices are
located;
(g) 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;
(h) Make more than one
outstanding loan that is secured by one title;
(i) Renew an existing
loan that is secured by one title more than two times after the loan is first
made; or
(j) Make a new title
loan to a consumer within seven days of the date on which a previous title loan
expires.
(2)(a) A lender in the
business of making title loans may not charge the consumer more than one fee
per loan transaction for dishonored checks or insufficient funds, regardless of
how many checks or debit agreements the lender obtains from the consumer for
the transaction. The fee may not exceed $20.
(b) A lender in the
business of making title loans may not collect a fee for a dishonored check
under ORS 30.701 or seek or recover statutory damages and attorney fees from a
consumer for a dishonored check under ORS 30.701. The lender may recover from
the consumer any fee charged to the lender by an unaffiliated financial
institution for each dishonored check. For a dishonored check or insufficient
funds, the fees described in this subsection are the only remedy a lender may
pursue and the only fees a lender may charge.
(3) The provisions of
ORS 725.600 to 725.625 do not prevent a lender from recovering amounts
associated with the collection of a defaulted loan that are authorized by
statute or awarded by a court of law.
SECTION 8c. If both House Bill 2203 and House Bill 2204
become law, section 8 of this 2007 Act (amending ORS 725.615) is repealed and
ORS 725.615, as amended by section 2, chapter 473, Oregon Laws 2007 (Enrolled
House Bill 2204), and section 2a, chapter 472, Oregon Laws 2007 (Enrolled House
Bill 2203), is amended to read:
725.615. (1) A lender in the business of making title loans may not:
(a) Make or renew a
title loan at a rate of interest that exceeds 36 percent per annum, excluding a
one-time origination fee for a new loan;
[(b) Charge an origination fee for a new title loan of more than $10 for
each $100 of the amount of the loan;]
(b) Charge during the
term of a new title loan, including all renewals of the loan, more than one
origination fee of $10 per $100 of the loan amount or $30, whichever is less;
(c) Make or renew a
title loan for a term of less than 31 days;
(d) Charge a consumer
any fee or interest other than a fee or interest described in paragraph (a),
(b) or (e) of this subsection or in subsection (2) of this section;
(e) Charge the consumer
more than the actual amount that the vendor or service provider charges the
lender for access to or use of the system described in section 5, chapter
472, Oregon Laws 2007 (Enrolled House Bill 2203) [of this 2007 Act];
(f) 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;
(g) Conduct a title loan
business where liquor or lottery tickets are sold or where gambling devices are
located;
(h) 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;
(i)
Make more than one outstanding loan that is secured by one title;
(j) Renew an existing
loan that is secured by one title more than two times after the loan is first
made; or
(k) Make a new title
loan to a consumer within seven days of the date on which a previous title loan
expires.
(2)(a) A lender in the
business of making title loans may not charge the consumer more than one fee
per loan transaction for dishonored checks or insufficient funds, regardless of
how many checks or debit agreements the lender obtains from the consumer for
the transaction. The fee may not exceed $20.
(b) A lender in the
business of making title loans may not collect a fee for a dishonored check
under ORS 30.701 or seek or recover statutory damages and attorney fees from a
consumer for a dishonored check under ORS 30.701. The lender may recover from
the consumer any fee charged to the lender by an unaffiliated financial
institution for each dishonored check. For a dishonored check or insufficient
funds, the fees described in this subsection are the only remedy a lender may
pursue and the only fees a lender may charge.
(3) The provisions of
ORS 725.600 to 725.625 do not prevent a lender from recovering amounts
associated with the collection of a defaulted loan that are authorized by
statute or awarded by a court of law.
SECTION 9. ORS 725.620 is amended to read:
725.620. (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 ORS 725.605, 725.610
or 725.615 or any rule adopted under ORS [725.625]
725.505 regulating a lender in the business of making title loans, 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 10. ORS 725.622, as amended by section 1, chapter
3, Oregon Laws 2006, is amended to read:
725.622. (1) A lender in the business of making payday loans may not:
(a) Make or renew a payday
loan at a rate of interest that exceeds 36 percent per annum, excluding a
one-time origination fee for a new loan;
[(b) Charge an origination fee for a new payday loan of more than $10
for each $100 of the amount of the loan;]
(b) Charge during the
term of a new payday loan, including all renewals of the loan, more than one
origination fee of $10 per $100 of the loan amount or $30, whichever is less;
(c) Make or renew a
payday loan for a term of less than 31 days;
(d) Charge a consumer
any fee or interest other than a fee or interest described in paragraph (a) or
(b) of this subsection or in subsection (2) of this section;
(e) 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;
(f) Conduct a payday
loan business where liquor or lottery tickets are sold or where gambling
devices are located;
(g) Renew an existing
payday loan more than two times; or
(h) Make a new payday
loan to a consumer within seven days of the day that a previous payday loan
expires.
(2)(a) A lender
in the business of making payday loans may not charge the consumer more than
one fee per loan transaction for dishonored checks or insufficient funds,
regardless of how many checks or debit agreements the lender obtains from the
consumer for the transaction. The fee may not exceed $20.
(b) A lender in
the business of making payday loans may not collect a fee for a dishonored
check under ORS 30.701 or seek or recover statutory damages and attorney fees
from a consumer for a dishonored check under ORS 30.701. The lender may recover
from the consumer any fee charged to the lender by an unaffiliated financial
institution for each dishonored check. For a dishonored check or insufficient
funds, the fees described in this subsection are the only remedy a lender may
pursue and the only fees a lender may charge.
(3) The provisions of
ORS 725.600 to 725.625 do not prevent a lender from recovering amounts
associated with the collection of a defaulted loan that are authorized by
statute or awarded by a court of law.
SECTION 11. ORS 725.625 and section 4, chapter 3,
Oregon Laws 2006, are repealed.
SECTION 12. The amendments to ORS 725.010, 725.045,
725.340, 725.345, 725.347, 725.505, 725.610, 725.615, 725.620 and 725.622 by
sections 1 to 10 of this 2007 Act apply to loans made or renewed on or after
July 1, 2007.
SECTION 13. (1) The Director of the Department of
Consumer and Business Services on the first business day after the effective
date of this 2007 Act shall determine by order from published sources the
discount rate upon which the annual percentage rate set forth in ORS 725.340
(1)(a)(B) will be based. The annual percentage rate shall apply to each new
loan made during the remainder of the 2007 calendar year, including all renewals
of the loan.
(2) The discount rate
determined under subsection (1) of this section shall remain in effect until
the director determines a new discount rate in accordance with ORS 725.340
(1)(a)(B).
SECTION 14. This 2007 Act being necessary for the
immediate preservation of the public peace, health and safety, an emergency is
declared to exist, and this 2007 Act takes effect July 1, 2007.
Approved by the Governor June 26, 2007
Filed in the office of Secretary of State June 27, 2007
Effective date July 1, 2007
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