Roseburg News Review
PORTLAND, Ore. (AP) - Oregon will tighten its rules to prevent payday lenders from getting a different license and continuing the same, high-interest-rate business, Gov. Ted Kulongoski said Thursday.
The new rules plug what Kulongoski called loopholes in a law to crack down on loans whose interest rates, according to a state study, averaged 528 percent last year.
After the Legislature approved the new law in April, limiting the annual interest rate to 36 percent, payday lenders were reported applying for what are called "conventional" licenses typically used in installment-loan businesses.
The new rules require conventional lenders to have experienced employees on staff and to do business as installment lenders traditionally have, Kulongoski said in a press release. He said conventional consumer finance lenders generally make longer-term installment loans based on a consumer’s credit-worthiness, but payday lenders make single repayment loans without credit checks.
The governor also said he would propose legislation in the 2007 session, which begins next month, to extend the payday loan restrictions to out-of-state and Internet lenders and to cap rates and fees on short-term loans secured by vehicle titles.
Payday Loan Fairness: [x] Yes, [] No
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