Payday Loan Industry Watch Home News: Archive News: Recent News: RSS Newsfeeds News: Archive News: By State News: By Big 7 Podcasts Reviews Tips Links
About Us
Contact Us
Donate/Sponsor
Site Help
Find a Lender
Header

Payday loan limits are long past due

November 22, 2006 - Eugene, Oregon

The apologists for the payday and car-title lenders that exploit the poorest, most vulnerable Oregonians have long insisted there's no real problem with lenders charging more than 500 percent interest on short-term loans.

Look, they say: Few borrowers have filed formal complaints with the state. What's the problem?

Well, it's never made any sense to measure the fairness or the morality of payday loans by how few poor people know to go to the Oregon Department of Consumer and Business Services to formally complain about being ripped off.

Thankfully there's now better information before Oregon policymakers. The state consumer services agency has issued a report on payday and car-title loans showing that last year alone more than 100 borrowers lost their cars, 3,400 were sued and 104,000 had problems repaying loans.

You can see why: Payday lenders charged annual rates of interest that averaged 528 percent and topped out at an outrageous 2,551 percent, according to the report.

That's obscene. This exploitation is still going on, too, because the Legislature chose not to put into immediate effect a law it approved April capping payday loan rates at 36 percent interest. That law doesn't take effect until July 2007 -- a delayed starting date designed to give payday lenders another crack at weakening the law in the next Legislature.

That won't happen now. The payday and car-title loan industries were among the biggest losers in the recent election. House Republicans, including Majority Leader Wayne Scott, R-Canby, who have defended the payday loan industry in Salem, no longer have partisan control of the Oregon House. They won't be in a position to weaken the law when lawmakers reconvene in January.

Instead, incoming speaker of the House, Rep. Jeff Merkley, D-Portland, is determined to close loopholes in lending laws and protect the state's most vulnerable consumers. He's sympathetic to arguments made by church leaders, Oregon Food Bank and AARP for an across-the-board cap on all lenders in Oregon, including car-title lenders, of 36 percent interest.

Some defenders of payday and car-title lenders say they are simply providing a needed service to the poor. There's no denying the large and growing demand for payday and car-title loans. Last year, according to the new report, payday lenders made 840,748 loans, a huge increase from the 285,000 loans made in 1999.

Yet payday and car-title lenders operate and serve tens of thousands of low-income borrowers in other states that have put reasonable limits on interest rates and penalty charges. Poor people in these states still have broad access to short-term loans. They just can't be so baldly exploited by lenders.

Oregon, to its shame, is one of the last places in this country to allow a lender to legally charge a poor, desperate borrower 2,551 percent interest.

News Source

The Oregonian, Editorial

Related Stories - Campaigns, Campaigning, and Lobbying

Related Stories - Oregon

Return

See: Recent News | Archived News | RSS Newsfeeds | News by State
Go to PLIWatch.org home.

E-mail This Page Open a new window and send this page to a friend.
Share this page by E-mail.
Podcasts Podcasts page.
Interview with David Farias - Founder, FYGO.com
Payday loan opponents caution people against taking payday loans. We interviewed David to better understand the practice and viability of an emerging source for loans: The Internet social lending network.

Interview with Pete Kowenhoven - Special Agent, FBI
Interview with Dr. Tom Lehman - Author of 'In Defense of Payday Lending'
Interview with Bill McCloskey - Email Data Source President and CEO
Reviews Reviews page.
July 21 - WeGiveCash claimed we could get $1,500. But, after entering qualifying customer information, we were declined and then forwarded to another Web site to re-apply.
Find a Lender Find a Lender page.
Claims to lend
To residents of
With fees per $100 loaned
On the Web since
reviewed by PLIWatch
small payday loan industry watch logo
Recent RSS Newsfeeds Archive Shown by State Shown by 'Big 7'
Home News & RSS Podcasts Reviews Tips Links Find a Lender About Us Contact Us Donate / Sponsor Site Help
Terms of Use Privacy Policy Site Map copyright © 2005-2024 pliwatch.org all rights reserved Updated: Nov 22, 2022 07:58 EST