72nd OREGON LEGISLATIVE ASSEMBLY--2003 Regular Session

Enrolled

Senate Bill 159

Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Governor Theodore R.
Kulongoski for the Department of Consumer and Business
Services)


CHAPTER ................


AN ACT

Relating to payday loans; creating new provisions; and amending
ORS 725.600 and 725.610.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 725.600 is amended to read:
725.600. As used in ORS 725.600 to 725.625:
(1) A lender is { + :
(a) + } 'In the business of making title loans' if at least 10
percent of all loans made by the lender are title loans.
{ + (b) 'In the business of making payday loans' if at least
10 percent of all loans made by the lender are payday loans. + }
(2) 'Lender' includes individuals, corporations, associations,
firms, partnerships, limited liability companies and joint stock
companies. 'Lender' does not include a financial institution or
trust company, as those terms are defined in ORS 706.008.
{ + (3)(a) 'Payday loan' means a loan, other than a purchase
money loan:
(A) Made primarily for personal, family or household purposes;
(B) Made for a period of 60 days or less or for which the
lender may demand repayment within 60 days; and
(C) Usually evidenced by a check or electronic repayment
agreement provided by or on behalf of the borrower.
(b) 'Payday loan' does not include a loan for a period of more
than 60 days, the repayment of which the lender may accelerate
upon a default by the borrower. + }
{ - (3) - } { + (4) + } 'Title loan' means a loan, other
than a purchase money loan:
(a)(A) Secured by the title to a motor vehicle, recreational
vehicle, boat or mobile home;
(B) Made for a period of 60 days or less;
(C) With a single payment payback; and
(D) Made by a lender in the business of making title loans; or
(b) That is secured, substantially equivalent to a title loan
as defined in paragraph (a) of this subsection, and designated as
a title loan by rule or order of the Director of the Department
of Consumer and Business Services.
SECTION 2. ORS 725.610 is amended to read:



Enrolled Senate Bill 159 (SB 159-A) Page 1

725.610. A person may not act as an agent or facilitator for
the purpose of making a title { + or payday + } loan without
first obtaining a license under this chapter, regardless of
whether the principal making the loan is required to obtain a
license.
SECTION 3. { + Sections 4 and 5 of this 2003 Act are added to
and made a part of ORS 725.600 to 725.625. + }
SECTION 4. { + A lender in the business of making payday loans
may not:
(1) Include in a payday loan contract:
(a) A hold-harmless clause;
(b) A confession of judgment or other waiver of the right to
notice and the opportunity to be heard in an action;
(c) An agreement by the consumer not to assert any claim or
defense arising out of the contract against the lender or any
holder in due course; or
(d) An executory waiver or a limitation of exemption from
attachment, execution or other process on real or personal
property held by, owned by or due to the consumer, unless the
waiver or limitation applies only to property subject to a
security interest executed in connection with the loan;
(2) Conduct a payday loan business where liquor or lottery
tickets are sold or where gambling devices are located;
(3) Charge the consumer more than one fee under ORS 30.701 per
loan transaction for dishonored checks when the consumer issues
more than one check to the lender. However, the lender may
recover from the consumer any fee charged to the lender by an
unaffiliated financial institution for each dishonored check;
(4) Renew a payday loan more than three times; or
(5) Make a new payday loan to a consumer on the same day that a
previous payday loan expires if the lender has renewed the
previous payday loan three times. The lender shall wait at least
until the next day after the expiration date of the previous loan
before making the new loan to the consumer. + }
SECTION 5. { + (1) A person claiming to be aggrieved by a
practice that violates section 4 of this 2003 Act, or the
person's attorney, may file with the Director of the Department
of Consumer and Business Services a verified complaint in
writing. The person shall state in the complaint the name and
address of the lender alleged to have committed the unlawful
practice and the particulars of the alleged unlawful practice.
The director may require the person to set forth in the complaint
other information that the director considers pertinent. The
person may file the complaint no later than one year after the
alleged unlawful practice.
(2) After the filing of a complaint under this section, the
director may cause an investigation to be made under ORS
725.310. + }
SECTION 6. { + Sections 4 and 5 of this 2003 Act and the
amendments to ORS 725.600 and 725.610 by sections 1 and 2 of this
2003 Act apply to payday loans offered on or after the effective
date of this 2003 Act. + }
Enrolled Senate Bill 159 (SB 159-A) Page 2


Passed by Senate April 18, 2003

...........................................................
Secretary of Senate

...........................................................
President of Senate

Passed by House May 22, 2003