Oregon Republicans Squash Dems’ Efforts To Regulate Payday Loans
Salem, OR — Representative Betty Komp (D-Woodburn) fought for a vote Tuesday on a bill that would have set rules in Oregon's presently unregulated payday-loan industry, protecting consumers from extremely high interest rates and what she calls "predatory lending practices," but the majority Republicans killed the effort on a party-line vote.
Senate Bill 545, which passed the Senate earlier this session, would have set a limit on the interest and fees that a lender may charge for payday loans — a limit where none now exists. The bill would have established a maximum of $15 for every $100 borrowed for the first loan, and $10 per hundred for each renewal loan.
The bill also would have set a 31-day term for payday advances, and would have required that the borrower pay a quarter of the principal for each renewal, up to a maximum of three loans. Komp noted that the permissible annualized interest rate allowed by SB 545 is still more than 390% APR.
The requirement for payment of 25 percent of the outstanding principal before the loan can be renewed reduces the probability that a low-income borrower would fall into a "bottomless pit of debt," Komp explained.