It’s Official: Oregon Legislature Puts Cap on Cash Loan Interest Rates
By J.J. CameronPayday Loan Writer
After months of criticism over payday loans in the state by consumer groups, Oregon has finally joined 43 other states Thursday in capping interest rates on cash loans of this nature.
Lawmakers at Thursday's special legislative session said that will reduce predatory quick cash loan lending practices that put Oregonians in an endless cycle of debt. Many people wind up paying annualized interest rates of 500 percent to cover various bills.
Senate Bill 1105 sets a $10 payday loan fee for each $100 borrowed, caps interest at 36 percent annually and requires a minimum loan duration of 31 days.
With the payday advance fee factored in, that's an annualized interest rate of 153 percent, said Charles Donald of the state Division of Finance and Corporate Securities.
A survey found that many state workers use payday loans to buy groceries, said Rep. Debi Farr, R-Eugene, during a floor debate. "How can we justify charging $216 for $300 worth of groceries?"
The Legislature adopted terms from a cash loan initiative being readied for Oregon's November 2006 ballot. Legislative leaders agreed to pass the measure as part of a bipartisan package deal.
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.
House Majority Leader Wayne Scott, R-Canby, disagreed with Minnis, a close ally."We are not passing this bill to protect people," he said. "We are passing this bill to protect ourselves."
