74th OREGON LEGISLATIVE ASSEMBLY--2007 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 1605
(Including Amendments to Resolve Conflicts)
B-Engrossed
House Bill 2871
Ordered by the Senate June 4
Including House Amendments dated April 30 and Senate Amendments
dated June 4
Sponsored by Representatives MERKLEY, DINGFELDER, Senator
AVAKIAN; Representatives BONAMICI, GALIZIO, NELSON, RILEY,
ROSENBAUM, SHIELDS, TOMEI, Senators METSGER, MONROE
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.
Sets maximum finance charge or interest rate at { + charge or
rate not to exceed + } 36 percent per annum { + or 30 percentage
points in excess of discount rate on 90-day commercial paper in
effect at Federal Reserve Bank of San Francisco, established
annually by Director of Department of Consumer and Business
Services, + } for all consumer finance, payday and title loans of
$50,000 or less. Permits lenders to charge only one origination
fee of not more than $10 of each $100 of loan amount of title or
payday loans, or $30, whichever is less. Subjects open-end loan
plans to 36 percent per annum interest cap. Restricts title
lenders from making or renewing title loans for terms of less
than 31 days and from renewing title loans more than two times.
Prohibits title lenders from charging certain fees for dishonored
checks.
Requires brokers making payday, title or consumer finance loans
to be licensed by Department of Consumer and Business Services.
Declares emergency, effective July 1, 2007.
A BILL FOR AN ACT
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 Oregon:
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
San Francisco. The Director of the Department of Consumer and
Business Services on the first business day of each calendar year
shall determine by order from published sources the discount rate
upon which the annual percentage rate set forth in this
subparagraph will be based. The annual percentage rate set forth
in this subparagraph shall apply to each new loan made during the
succeeding 12 months for the entire term of the loan, including
all renewals of the loan.
(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 ___, 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
San Francisco. The Director of the Department of Consumer and
Business Services on the first business day of each calendar year
shall determine by order from published sources the discount rate
upon which the annual percentage rate set forth in this
subparagraph will be based. The annual percentage rate set forth
in this subparagraph shall apply to each new loan made during the
succeeding 12 months for the entire term of the loan, including
all renewals of the loan.
(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 ___, Oregon Laws 2007 (Enrolled
House Bill 2205), 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 { - 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 ___, 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 ___, 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 ___, 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 ___,
Oregon Laws 2007 (Enrolled House Bill 2204), and section 2a,
chapter ___, 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 ___,
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. + }
----------