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.

Just as Jeff Merkley fought against predatory payday lenders in Oregon, so too will he take that fight to the U.S. Senate. Merkley will fight for a national 36 percent interest rate cap on these short-term personal finance loans. Such a cap is the only effective way to protect consumers from an industry that preys on our society.[1]

In 2007, the federal government placed a cap on payday loans to members of the military at 36 percent. This came after a Defense Department report said that payday "loans at 400% and up... and other harmful lending undermine troop readiness, morale, and quality of life."[2]

To read Jeff's plan to restrict predatory payday lenders, please click here.

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

More Information on Merkley and Helping Families Get Ahead

• Merkley Announces Plan to Cut Taxes for Middle Class Americans
• Smith's Negative Ads Can't Hide the Truth About Jeff Merkley
• Gordon Smith Fails Coastal Communities
• Smith Attacks Merkley for Creation of Rainy Day Fund
• Merkley Announces 100 Towns for Change
• Basic Rights Oregon Endorses Jeff Merkley for U.S. Senate
• Jeff Merkley Announces New Crackdown on Payday Loan Sharks
• Merkley: Feds Must Clamp Down on Payday Loans
• Gordon Smith Earns "D" Grade on Middle Class Issues
• Merkley: Oregon's Rural Counties Deserve a Long-Term Contract with the Federal Government
• Merkley: The President's Budget is Another Bad Deal for Oregonians
• Merkley: In his final State of the Union address, President Bush should be honest with the American people
• Merkley Praises Oregon's Anti-Price Gouging Effort, Calls for Congressional Action
• Mayors, Local Officials Support Merkley for U.S. Senate

News on Merkley and Helping Families Get Ahead

• Senate race: Smith serves the wealthy
• Smith exaggerates in hitting Merkley on taxes
• Smith and his odyssey on corporate kicker
• Merkley toasts the end of predatory lenders
• Holvey: Merkley leads on protecting consumers
• Merkley Revives Bill: Thousands Could Have Been Helped by His Legislation
• Merkley: A Better Road for Oregon's Homeowners
• Big Win for House Speaker Jeff Merkley
• Foreclosure scam law sails through the House

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[1] King and Parrish, Springing the Debt Trap, at 4.

[2] Department of Defense, Report On Predatory Lending Practices Directed at Members of the Armed Forces and Their Dependents, at 45, 8/9/06.

Posted November 7, 2007
Issues