Helping Families Get Ahead

When Jeff was elected to the state legislature in 1998, the first thing he did was file a bill to cap the interest rate that Oregonians have to pay for payday loans. At the time, the state House of Representatives was controlled by Republican leadership, who had little interest in helping the bill succeed. But he didn’t give up. And this year, as Speaker of the House, he was finally able to get that bill through.

Oregon is fortunate to have some very good corporate citizens who contribute in a positive way to our communities. But there are those rare occasions where bad actors try to take advantage of consumers to make a fast buck. Jeff identified them and took a stand against them on behalf of Oregon consumers in the legislature.

Capping Payday Loan Rates

Jeff was the chief sponsor of House Bill 2871, which imposes an interest rate cap of about 36 percent on state-regulated consumer loans in Oregon. It protects borrowers of the more than 850,000 short-term payday and car title loans issued each year in Oregon. Prior to this legislation, Oregon was one of only 16 states that did not cap interest rates on consumer loans. Since the legislature lifted the usury cap in 1981, predatory lenders have flourished, charging rates on consumer loans that have at times exceeded 500 percent.

Check Cashing, Internet Lending, and Car Title Lending

Left unchecked, some lenders have devised other methods of bleeding family finances. They have found creative ways around Oregon law, charging high interest rates and excessive fees. So under Jeff’s leadership, the legislature put a stop to it. They capped the amount check cashers can charge; made sure loans made by internet, phone, and mail were subject to the same usury laws as bricks-and-mortar lenders; and capped the interest rate on loans that use car titles as collateral.

But there is more work to be done.

Credit Card Companies

Congress should take a hard look at abusive practices of some in the credit card industry. Limiting bait-and-switch marketing, requiring the disclosure of the true-cost of making minimum payments, and restoring the 10-day grace periods that used to be standard in credit agreements are all ways to guarantee families are on an even playing field when it comes to their finances.

Mortgage Lenders

Among mortgage lenders, prepayment penalties and excessive fees have become the norm for extracting more and more hard earned cash out of consumers. States have led the way on trying to protect families from losing their most important asset—their home; it is now time for Congress move in that direction too, banning those practices when they cross the line from legitimate transactions into predatory practices.

Sub-prime Lending

Too many American families have lost their homes in the recent housing market collapse for Congress to stand by and don nothing. Big lenders like Countrywide locked homebuyers into loans they couldn’t afford, refused to help families refinance, and then skipped town when the bubble burst. That’s no way to build a strong economy and it is no way to put families on sound financial footing. The principle is simple, if a borrower can’t afford the loan, the underwriter should not approve them. Jeff will work in the Senate to make sure this housing mess doesn’t happen again.

Read Jeff Merkley's Plan To Protect Families And Consumers From Payday Lending Sharks here

Posted November 7, 2007
Issues

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