The Statesman Journal
BY TIMOTHY ALEX AKIMOFF
July 18, 2006
KEIZER - Keizer City Councilor Charles Lee has proposed a payday-loan-reform ordinance that would restrict such loans long before a statewide law goes into effect in July 2007.
Similar ordinances already are in effect in Bend, Oregon City, Silverton, Troutdale, Gresham and Portland. They complement a statewide law passed during the April special session.
"I heard that other cities were taking a lead on this," Lee said. "That’s what piqued my interest."
The ordinance would give borrowers the right to a payment plan; end interest-only payments by requiring payment on principle before each new loan; and allow borrowers to cancel the loan within 24 hours without penalty.
"The payday-loan industry seems like a huge problem for working families," Lee said, adding that he became aware of the problem from his work with the No Meth - Not in My Neighborhood task force.
The state law will cap interest rates that lenders may charge for short-term payday loans.
"You walk into a storefront with proof of income, write a check for $360 for a $300 loan," said Angela Martin, a spokeswoman with Our Oregon. "Two-thirds of borrowers ask for more time, and after eight weeks, that loan is now $540."
Our Oregon is a largely union-funded coalition working on initiative campaigns.
Martin said the problem is big and getting bigger, with 2,000 loans per day in Oregon, a 2004 study shows.
Silverton city leaders were quick to discuss a payday-loan ordinance.
"We had members of the community who said that people in need were struggling," Silverton City Councilor Randal Thomas said.
The Silverton City Council adopted its law in May. The law sunsets when the state law goes into effect.
Several large, faith-based charities and other groups such as Oregon Food Bank, Our Oregon, the Oregon Hunger Relief Task Force and the Oregon Catholic Conference are supporting city ordinances.
"The Legislature decided to give a year," Lee said. "A city ordinance would provide immediate protection for Keizer citizens."
Payday Loan Fairness: [x] Yes, [] No
©2006 Our Oregon. All rights reserved. Photos by Leah Nash.