Merkley toasts the end of predatory lenders

Merkley celebrates loan store closures
Mapes on politics, 3/27/08

Politicians running for office don't usually like to brag about driving businesses and jobs out of the state, but there was House Speaker Jeff Merkley, D-Portland, on Thursday afternoon toasting the impending demise of the Check into Cash chain of payday loan stores in Oregon.

Merkley cracked open a bottle of sparkling juice, poured drinks and complained that the high-interest-rate lenders had been "stripping wealth from Oregonians" before the Legislature cracked down on them. "We're here to say they're leaving the state and we're happy about it," said Merkley.

Ernie Daniels, manager of the 12 Oregon Cash Into Check stores, said they would be closing April 19 but otherwise referred comment to his corporate headquarters back east (which was closed for the day by the time I got to them). State officials say there are only about 100 payday and title loan lenders left in the state, compared to 329 before a new law took effect July 1 capping interest rates at 36 percent.

Maryann Olson, 60, who lives on Social Security disability, was on hand to provide her own story, of borrowing $150 to buy special orthopedic shoes. When she couldn't pay it all back on time, she ended up in a cycle of roll-over loans that cost her at least $1,900 by the time the ordeal was over, she said.

Merkley also took the occasion to get in a dig at Sen. Gordon Smith, R-Ore., on the issue. He dug up Smith's 2001 vote against an amendment to a bankruptcy bill that would have prevented lenders charging more than 100 percent interest from pursuing claims in bankruptcy court. I wasn't able to get a solid explanation out of Smith's office due to the time difference, so I'll have to figure this one out on another day.

Merkley said he'd like to pursue federal legislation cracking down on payday lenders. And he said he thinks low-income borrowers will still have options even with the decline of the industry. He said some payday lenders will stay in business and make up in volume what they lose in profits because of the cap on interest rates. And he said credit unions are becoming more active in making small loans.

Posted March 28, 2008
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