Payday Loan Writer
Scores of Oregon payday and car title lenders have closed their doors, as a 36 percent interest rate cap on regular and faxless payday loans and other new regulations took effect last week.
Gone are the 520 percent annual interest rates that were common among payday lenders before the Legislature recently passed new regulations. Gone, too, are many of the lenders. But among those who remain, borrowers will find their small, short-term loans cost about a third of what they cost before.
At least 60 no faxing payday loan stores have closed or surrendered their licenses since June 1, says Charles Donald, supervising examiner at the state Department of Consumer and Business Services.
Luanne Stoltz left a 20-year career as a high school math and science teacher years ago to open two payday stores in Portland. She has closed them both and says she doesn’t know what she will do next. “I’m out of business,” she said.
Check ‘n Go Inc., a payday advance loan lender based in Mason, Ohio, will close its 21 Oregon stores because of the new regulations, a spokesman said. Advance America, Cash Advance of Spartanburg, S.C., the nation’s largest payday loan company, is evaluating whether it can keep its 45 Oregon stores open, said Jamie Fulmer, director of investor relations for the company, which operates in 37 states.
“The economic situation that exists in Oregon currently is one that we think is prohibitive,” Fulmer said.
Northwestern Title Co., based near Atlanta, has stopped making car title loans in its 17 Oregon stores, which it is preparing to close, said Ken Wayco, president. Car title loans are similar to payday loans except they use car titles rather than the borrower’s next paycheck as collateral.
Northwestern recently filed a lawsuit in Marion County Circuit Court challenging the constitutionality of the new law that caps interest at 36 percent for all consumer loans.
“Unless we prevail in the suit there, we’re all out of business,” Wayco said.
Still, more than 200 personal cash loan lenders are doing business, at least for now, under the Legislature’s new regulations.
“It looks like some businesses are able to provide more affordable loans, and that sounds like a real win for the community and consumers,” said Patty Wentz, spokeswoman for Our Oregon, a nonprofit progressive coalition that led the fight for laws regulating payday and car title lenders.
The new laws allow pay day loan and car title lenders to charge an origination fee of $10 per $100 loaned, though no more than $30 for a loan of any amount. Loans must be for at least 31 days. Lenders can charge 36 percent annual interest, or about $3 per $100 in addition to the origination fee.
That means lenders can charge a total of $13 per $100, which amounts to an annual interest rate of about 154 percent for a 31-day loan.
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