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Cracking Down on Predatory Lenders

As our economy recovers from the devastation of the financial crisis, it's crucial that Oregonians are able to hang onto as much of their hard-earned money as possible. Unfortunately, with tough times come unscrupulous businesses looking to profit off the misfortune and vulnerability of others.

Short-term, high-interest loans are just one such product. Oregon successfully drove out the majority of predatory payday loan shops thanks to capping interest rates on lenders in 2007. Apparently, managing to turn a healthy profit under the 36% rate cap was beyond the business acumen of those who chose to pack up and find fewer restrictions on price gouging.

But there are still predatory loans out there that are tougher to rein in. Offshore companies are getting into the game through the internet, and stateside companies are skirting usury laws by taking advantage of sovereign Native American tribes. This new crop of abuses had U.S. Senator Jeff Merkley in Portland yesterday, unveiling new legislation he'll be introducing to crack down on these predatory practices. Joining him in the event was EFO Executive Director Angela Martin, and Innovative Changes Executive Director Nancy Yuill. Both EFO and IC seek to protect consumers from these types of financially-draining traps, and applaud the Senator's responsiveness to the issue. While EFO works to promote policy changes to protect Oregonians, IC helps by offering fair rates on short-term loans to help struggling Oregonians avoid companies out to take advantage off them with sky-high interest.

Unfortunately, not everyone is aware there are alternatives available. At yesterday's event, Senator Merkley shared the story of a Portland resident who fell prey to an offshore payday loan company. Gail was struggling to pay bills, so she started to fill out an online application to see if there were any affordable options available to provide her some temporary relief. Despite the fact that she never completed the application, a company named Everest Cash Advance deposited $400 into her checking account. Over the next month, the company proceeded to make weekly withdrawals from Gail's account - for a grand total of $804!

One of the elements of Senator Merkley's new bill would prohibit that level of access to an individual's private account. In addition to the legislation the Senator will be introducing, he also sent a letter to the Consumer Financial Protection Bureau, asking the agency to address the issue of predatory payday lending.

Lane County Legislators Host Foreclosure Town Hall

Last Wednesday, just two days after the 2012 legislative session ended, Lane County legislators hosted a community town hall to discuss the recently passed foreclosure mediation bill, as well as the multi-state foreclosure settlement.

The crowd welcomed two of the primary sponsors and legislative champions of SB 1552, Senator Lee Beyer and Representative Paul Holvey. It was a great opportunity to thank them for their hard work and leadership. They provided an overview of the new law and answered questions from homeowners, some of whom have been struggling for months on end to get straight answers from their banks. Click here for a summary of SB 1552.

The event also featured a presentation from NEDCO, a private non-profit CDC serving Lane and Marion counties. One of the many sevices NEDCO provides is free foreclosure counseling. Visit www.nedcocdc.org for more information.

The Oregon Department of Justice was also on hand to help explain the multi-state foreclosure settlement. You can find more information about the settlement and learn what you need to do to apply if you believe you are eligible here.

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Economic Fairness Oregon is a non-profit, non-partisan organization dedicated to consumer protection and fair lending laws. Our goal is to restore a financial system built to work for the people, not against them.

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