Thursday, February 08, 2007
STEVEN CARTER
The Oregonian
About one in eight low-income Oregonians pays a fee to have payroll or other checks cashed, according to a new analysis by a public interest research group.
The analysis, by the progressive Oregon Center for Public Policy, concludes that about 100,000 Oregon adults with incomes of less than $30,000 paid a fee to cash a check in the year just before a survey taken last summer.
"The new data indicate the check-cashing fees are a drain on the incomes of many low-income Oregonians," said Michael Leachman, a policy analyst with the center. National data indicate that nine out of 10 customers visit check-cashing services at least once a month, he said.
The analysis was done by looking at responses on the Oregon Population Survey, a biennial questionnaire paid for by state agencies to take a snapshot of Oregonians’ incomes, education, jobs and purchasing habits, among other topics. Last year, the survey included six questions about Oregonians’ banking and lending habits. About 4,500 households were surveyed; from that the Oregon Center for Public Policy extrapolated statewide estimates about use of payday lenders and check-cashing services.
The analysis comes at a point when several bills aimed at reining in the high rates charged by short-term lenders and check-cashing services are moving toward a vote in the Oregon House -- probably next Thursday. One would restrict fees charged by check-cashing businesses, which are now unregulated. Two others put out-of-state Internet payday lenders and companies that make car title loans under the same 36 percent interest rate cap imposed on in-state payday lenders last year in a special session of the Legislature. The center’s analysis found that 9 percent of payday loans are made over the Internet.
A fourth bill tries to prevent car title and payday lenders from escaping the interest restrictions by buying conventional consumer-lending licenses, which are not subject to the 36 percent cap. It would require lenders with conventional licenses to have 90 percent of their loans exceeding six months, and be approved by experienced underwriters.
Leachman said the public policy center analysis showed that residents in Crook, Deschutes and Jefferson counties in Central Oregon were most likely to pay to cash checks. Sixteen percent of all adults in those three counties in the survey reported paying check-cashing fees.
Cory Streisinger, director of the Department of Consumer and Business Services, said the bills are needed to address the problem of short-term, high-interest loans in Oregon. Patty Wentz, spokeswoman for Our Oregon, said a blanket interest-rate cap is needed for all consumer lending companies. Our Oregon is working on a bill that would extend the 36 percent cap to all retail lenders, except banks and credit unions.
Payday Loan Fairness: [x] Yes, [] No
©2006 Our Oregon. All rights reserved. Photos by Leah Nash.