Consumer Advocates Urge for Payday Loan Reform in Oregon
By J.J. CameronPayday Loan Writer
On Thursday, social activists, church leaders and others urged a Senate committee to propose a tough law regulating payday lenders, who charge high interest on small loans, for the Legislature's special session next week." The Oregonian had the report.
Why wait?" asked Angela Martin, campaign manager for Our Oregon, a nonprofit progressive political group collecting signatures for a ballot initiative that would dramatically cut the amount payday payday loan lenders could charge. "It is a problem that can be solved as early as next week," she told the committee, which met in Portland.
Payday advance lenders said the initiative, or a law patterned after it, would put them out of business and force people needing short-term, small loans to turn to lenders on the Internet and across state borders, to pawn shops, to car title lenders, to illegal sources or to bouncing checks.
Such legislation "will reduce revenue in our industry by 70 percent," said Mark Thomson, representative of a national payday loan group called Community Financial Services Association of America.
A payday loan proposal
Sen. Floyd Prozanski, D-Eugene, chairman of the Senate consumer protection committee holding the hearing, said he and Debi Farr, R-Eugene, who is chairing a House committee examining the payday loan industry, are negotiating with legislative leaders on a proposed cash advance reform bill for the special session next week.
Prozanski said prospects are good that they will settle on "some reasonable regulations." Gov. Ted Kulongoski and Democratic legislative leaders say they will settle for no payday reform law in the special session that is not at least as restrictive as the initiative.
The initiative for the Nov. 7 ballot would limit fees on an initial payday loan to a $10 fee plus 36 percent annual interest, or $13, per $100. The borrower would have 31 days to repay the loan. Only two rollovers at 36 percent interest would be allowed.
State officials said in a review of 546 cash loans from 30 payday lenders last year, they found borrowers on average took out 16 loans a year.
Karry Miller, 44, an office clerk and single mother from Milwaukie, told the committee she now owes money to four payday lenders and expects her electricity and phone to be turned off.
"I'd like to stop this cycle," she said. "I want my paychecks back."
April 15th, 2006 at 2:47 pm
[…] The payday loan business is facing a growing battle in the Oregon Legislature. The voice of consumers such as Voss - actually showing support for these resources - needs to be heard. He said he has received about 10 payday loans in his life and, despite the astronomical fees, he has always paid them back on time. He has no regrets. […]
April 19th, 2006 at 2:35 pm
[…] While payday loan reform is gaining momentum is states such as Oregon, companies that specialize in these cash advances are still seeing significant profits. […]
April 22nd, 2006 at 8:48 am
[…] House Speaker Karen Minnis, R-Wood Village, called for adding a payday loan bill to the special session agenda. Two cities in her district enacted ordinances restricting payday loans, and her re-election opponent is attacking her for squelching a payday loan bill before the 2005 Legislature. […]