Predatory Lending

Oregon Protects Consumers From Payday Loans

From Consumer Law & Policy Blog by Public Citizen:

 Oregon Governor Ted Kulongoski yesterday signed into law a package
of bills designed to protect consumers against abuses by the payday
lending industry and other short-term lenders that target vulnerable
borrowers with high-interest loans.  Together, the new laws will, among
other things, cap interest rates, limit rollovers of short-term loans,
and attempt to regulate internet transactions.  Importantly, the
interest rate caps are not limited to specific loan products — which
would facilitate evasion as lenders responded by modifying their loans
to take them outside the laws’ restrictions — but apply to all
consumer finance loans involving amounts less than $50,000.

  The new laws should significantly ease the triple-digit interest
rates charged by payday lenders and their cousins, auto title lenders. 
Indeed, payday lenders say the new laws will drive them out of the
state altogether.  Whether that is so remains to be seen, but the laws
still allow payday lenders, through a combination of interest rates and
“origination fees,” to charge effective annual interest rates of well
over 150% on one-month loans.

There’s much more at the CL&P blog about this law. I urge all SC readers to check it out. If it sounds good to you, why not write to your state legislators? Click here to identify your legislators, then drop them a line.

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