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| Home > Statutes > Usa Oregon |
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USA Statutes : oregon
Title : TITLE 54 LOAN ASSOCIATIONS AND LENDING INSTITUTIONS
Chapter : Chapter 725 Consumer Finance; Title and Payday Loans
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As used in this chapter:
(1) “Department” means the Department of Consumer and Business
Services.
(2) “Director” means the Director of the Department of Consumer and
Business Services.
(3) “Licensee” means every person licensed under this chapter.
[Amended by 1985 c.762 §106; 1987 c.373 §66; 1993 c.744 §26] Nothing in this chapter shall be
construed or held to limit the rights, powers or privileges granted to
any person by any law of this state or of the United States whereby the
loaning of money or extending of credit is regulated, provided that such
person is operating in compliance with the provisions of such law.
[Formerly 725.040]
No person,
without first obtaining a license under this chapter, shall make a
consumer loan of $50,000 or less, except as provided under ORS 82.010,
82.020 and 82.025. [1989 c.424 §2] No licensee shall take:
(1) Any power of attorney from any borrower, except a power of
attorney to effectuate the transfer of the ownership of any motor vehicle
at the time of making a loan on a motor vehicle.
(2) Any note or promise to pay which does not accurately disclose
the actual amount of the loan, the time for which it is made, the rate of
interest charged or the schedule of payments agreed upon, or any
instrument in which blanks are left to be filled in after execution.
[Amended by 1955 c.71 §3; 1971 c.450 §2; 1979 c.88 §41; 1981 c.412 §13] No licensee or other person
shall advertise, print, display, publish, distribute or broadcast or
cause or permit to be advertised, printed, displayed, published,
distributed or broadcast in any manner whatsoever any statement or
representation with regard to the rates, terms or conditions for loans
which is false, misleading or deceptive.A license shall not be granted to any person under this
chapter unless the person is legally qualified to conduct business in
this state. [Amended by 1999 c.469 §1]
(1)
Application for the license shall be in writing in the form prescribed by
the Director of the Department of Consumer and Business Services and
shall contain the name and both the residence and business addresses of
the applicant, and if the applicant is a partnership or association, of
every member thereof, and if a corporation, of each officer and director
thereof. The application shall also contain the county and city with
street and number, if any, where the business is to be conducted and any
other information which the director may require.
(2) Notice of the filing of the application shall be posted in the
office of the Department of Consumer and Business Services for 30 days
and no license shall be issued before the expiration of such 30-day
period. However, the director may waive the posting of notice and issue a
license without regard to such 30-day period if the application is for a
license at a location where a license has been surrendered because of:
(a) The transfer of the business of the licensee, and the applicant
is the transferee;
(b) The death of the licensee, and the applicant is a
representative or heir of the licensee; or
(c) The change of the name under which the licensee does business,
and the applicant is the same licensee.
(3) An applicant at the time of making application shall pay to the
director a license fee determined under ORS 725.185 for the period
terminating on the last day of the current calendar year. In case the
license is not issued for cause or if the application is withdrawn after
the applicant has been investigated by the director, there shall be
refunded to the applicant all the license fee except any portion thereof
determined by the director to reflect administrative and investigative
costs incurred by the section relative to the application. Otherwise no
part of any license fee shall be refunded. [Amended by 1955 c.71 §4; 1977
c.135 §49; 1985 c.762 §114] (1) Conditioned upon the
applicant’s compliance with this chapter and the payment of the license
fee, the Director of the Department of Consumer and Business Services,
within 90 days after the date of filing the application referred to in
ORS 725.120, shall disapprove the application or shall issue and deliver
a license to the applicant to make loans in accordance with this chapter
at the location specified in the application. However, before issuing a
license, the director must first find upon investigation:
(a) That the financial responsibility, experience, character and
general fitness of the applicant, and of the members thereof if the
applicant is a partnership or association, and of the officers and
directors thereof if the applicant is a corporation, are such as to
command the confidence of the community and to warrant the belief that
the business will be operated honestly, fairly and efficiently within the
purposes of this chapter; and
(b) That grounds for disapproval of an application described in ORS
725.145 do not exist and that, in the judgment of the director, there are
no other reasons or conditions that would warrant the refusal to grant a
license.
(2) A license issued under this section shall be a continuing
license and shall remain in full force and effect until the license is
surrendered by the licensee as provided in ORS 725.250 or revoked or
suspended as provided in ORS 725.230. [Amended by 1955 c.71 §5; 1963
c.167 §1; 1977 c.135 §50; 1985 c.762 §115; 1999 c.469 §2] The Director of the
Department of Consumer and Business Services may disapprove an
application for a license if any person named in the application
submitted pursuant to ORS 725.120:
(1) Is insolvent, either in the sense that the person’s liabilities
exceed the person’s assets or that the person cannot meet the person’s
obligations as they mature, or is in such financial condition that the
person cannot continue in business with safety to the person’s customers;
(2) Has engaged in dishonest, fraudulent or illegal practices or
conduct in any business or profession;
(3) Has knowingly or repeatedly violated or failed to comply with
any provision of the Oregon Bank Act, the Savings Association Act, the
Oregon Credit Union Act, the Oregon Consumer Finance Act or the
Pawnbrokers Act, or any administrative rule or order adopted pursuant to
any such Act;
(4) Has been convicted of a crime, an essential element of which is
fraud;
(5) Is permanently or temporarily enjoined by a court of competent
jurisdiction from engaging in or continuing any conduct or practice
involving any aspect of the consumer finance business;
(6) Is the subject of an order of the director, subjecting the
person to a fine or other civil penalty under the Bank Act, ORS chapter
722 or 723 or this chapter, or removing the person from an office in any
entity regulated under the Bank Act, ORS chapter 722 or 723 or this
chapter; or
(7) Is the subject of an order entered within the past five years,
subjecting the person to a fine or other civil penalty, or removing the
person from an office in a state banking institution, a national bank, a
state or federal savings association, a state or federal credit union or
a consumer finance company, issued by the regulatory authority of another
state or of the federal government with authority over such banking
institutions, savings associations, credit unions or consumer finance
companies. [1977 c.135 §48; 1985 c.762 §116; 1987 c.373 §68; 1987 c.650
§11] If the Director of
the Department of Consumer and Business Services disapproves an
application for a license, the director shall notify the applicant
immediately, giving the reason for the disapproval. [Amended by 1985
c.762 §117; 1987 c.650 §12] The license
shall be in a form prescribed by the Director of the Department of
Consumer and Business Services and shall state the address at which the
business is to be conducted and the full name of the licensee. The
license shall be kept conspicuously posted in the place of business of
the licensee and shall not be transferable or assignable. [Amended by
1955 c.71 §6; 1985 c.762 §118] (1) Each licensee
shall pay to the Director of the Department of Consumer and Business
Services each year the license fee determined by reference to the
schedule adopted by the director under ORS 705.620. The fee shall be paid
by the date set by the director in the rule establishing the schedule.
(2) In addition to any license fee collected under subsection (1)
of this section, whenever the director devotes any extra attention to the
affairs of a licensee, either upon determination by the director or upon
request of the licensee, the fee for the extra service shall be the
actual cost thereof. [1985 c.762 §119; 1987 c.171 §7; 1987 c.373 §69] (1) On
or before February 15 of each year, or on such other date established by
the Director of the Department of Consumer and Business Services by rule,
every licensee shall file a report with the director. The report shall
contain relevant information required by the director concerning the
business and operations during the preceding calendar year of each
licensed place of business conducted by the licensee within the state.
The report shall be in the form prescribed by the director.
(2) Every licensee who fails to file any report required under this
chapter within the time specified may be subject to a penalty of $10 per
day for each day’s delay. [Amended by 1955 c.71 §8; 1973 c.428 §2; 1985
c.762 §120; 1999 c.469 §3; 2005 c.21 §13] No licensee shall
transact any business within the scope of this chapter except under the
name and at the place of business named in the license. The Director of
the Department of Consumer and Business Services may issue more than one
license to the same licensee if the licensee complies with all the
provisions of this chapter governing an original issuance of a license
for each such additional license. However, each additional license shall
be for a separate and distinct place of business for making and
completing loans as provided in this chapter. [Amended by 1985 c.762 §121] (1) When a licensee wishes to
change the place of business to another location, the licensee shall
submit written notice thereof, together with the license, to the Director
of the Department of Consumer and Business Services. The director shall
amend the license of the licensee to reflect the new location and shall
return the amended license to the licensee.
(2) A change in the place of business of a licensee to a location
outside the city named in the original license may be allowed under the
same license only if the director determines that the new location will
serve substantially the same community as is served at the location named
in the original license.
(3) If the director disapproves the proposed new location of the
business, the director shall immediately notify the licensee of the
disapproval and return the license unchanged to the licensee. [Amended by
1955 c.71 §9; 1985 c.762 §122; 1987 c.650 §13; 1999 c.469 §4] (1) The Director of
the Department of Consumer and Business Services may revoke any license
under this chapter upon 10 days’ notice to the licensee stating the
contemplated action and in general the grounds therefor and upon
reasonable opportunity for a hearing in connection therewith, if the
director finds that:
(a) The licensee has failed to pay the annual license fee or to
comply with any demand, ruling or requirement of the director made
pursuant to this chapter or to comply with the provisions of law to keep
the corporation in good standing if such licensee is a corporation;
(b) The licensee has violated any provisions of this chapter or any
rule made by the director under the authority of this chapter; or
(c) Any fact or condition exists which, if it had existed at the
time of the original application for such license, clearly would have
warranted the director in refusing originally to issue the license.
(2) The director, without notice or hearing, may suspend any
license for a period not exceeding 30 days, pending investigation.
(3) The director may revoke or suspend only the particular license
with respect to which grounds for revocation or suspension may occur or
exist, or, if the director finds that such grounds for revocation or
suspension are of general application to all offices or to more than one
office operated by a licensee, the director may revoke or suspend all the
licenses or such number of licenses issued to the licensee as the grounds
for revocation or suspension apply to, as the case may be. [Amended by
1955 c.71 §10; 1985 c.762 §123] (1)
If the Director of the Department of Consumer and Business Services
denies a license, or proposes to revoke or suspend a license, opportunity
for hearing shall be accorded as provided in ORS chapter 183.
(2) Conduct of hearings, issuance of orders and judicial review of
rules and orders shall be as provided in ORS chapter 183. [1971 c.734
§176; 1985 c.762 §124; 1987 c.650 §14] (1) Any licensee may surrender any
license issued to the licensee by delivering written notice to the
Director of the Department of Consumer and Business Services that the
licensee thereby surrenders the license.
(2)(a) A licensee shall surrender any license issued to the
licensee under which there has been no material loan activity for a
period of 12 consecutive months.
(b) For purposes of this subsection, “material loan activity”
includes new loans, refinancing of existing loans or formal extensions of
existing loan repayment provisions in excess of 30 days.
(3) Surrender of a license under subsection (1) or (2) of this
section shall not affect the licensee’s civil or criminal liability for
acts committed prior to surrender. [Amended by 1985 c.762 §125; 1999
c.469 §5]
The revocation, suspension or surrender of any license shall not impair
or affect the rights or obligations of any preexisting lawful contract
between the licensee and any borrower. [Amended by 1955 c.71 §11] The Director of the
Department of Consumer and Business Services may reinstate any revoked
license upon the licensee’s compliance with the provisions of law or any
demand, ruling or requirement made by the director under this chapter.
For such reinstatement of license the licensee shall pay a fee of $25.
[Amended by 1985 c.762 §126]REGULATION (1) For
discovering violations of this chapter and securing information required
by the Director of the Department of Consumer and Business Services under
this chapter, the director at any time may investigate the loans and
business, including the books, accounts, records and files used in the
loans and business, of every person licensed or required to be licensed
under this chapter.
(2) For purposes of subsection (1) of this section:
(a) A person licensed or required to be licensed under this chapter
shall give the director free access to the person’s place of business,
books, accounts, safes and vaults.
(b) The director may:
(A) Make an investigation without prior notice to the person being
investigated.
(B) Compel the attendance of witnesses and examine the witnesses
under oath.
(C) Require the production of documents or records.
(3) Each person examined under this section shall pay the actual
cost of an investigation to the director. The director may maintain an
action for the recovery of the costs in any court of competent
jurisdiction. [Amended by 1955 c.71 §12; 1973 c.428 §3; 1981 c.412 §14;
1985 c.762 §127; 1987 c.215 §15; 1999 c.469 §6; 2005 c.338 §24] (1) Each licensee
is subject to inspection by the Director of the Department of Consumer
and Business Services. The director shall conduct an examination of each
licensee to determine whether the licensee is complying with the
provisions of this chapter and rules adopted thereunder and to secure
information required by the director under this chapter. The examinations
of a licensee shall be conducted not more than 24 months apart.
(2) In addition to examinations under subsection (1) of this
section, the director may conduct examinations of a licensee at other
times as the director deems necessary.
(3) For purposes of any examination under this section:
(a) The director shall have free access to the place of business
and to the books, accounts, safes and vaults of the licensee.
(b) The director may conduct an examination without prior notice to
the licensee.
(c) The director shall have authority to examine under oath all
persons whose testimony the director may require in order to conduct the
examination. [1987 c.215 §14] If the
Director of the Department of Consumer and Business Services finds that
any officer or director of a licensee is dishonest, reckless or
incompetent, or refuses to comply with the law, rules of the director or
any written requirements or instructions of the director, the director
may issue a written order to the individual removing or suspending the
individual from the individual’s office or position. [1977 c.135 §52;
1985 c.762 §128]The Director of the Department of Consumer and Business Services
by order may direct a licensee to remove an officer or director of the
licensee from office for any of the reasons stated in ORS 725.145. [1987
c.650 §16]A person may not knowingly give or cause to be given to the
Director of the Department of Consumer and Business Services any document
or any oral or written statement or report that is false in any material
respect, in the course of any investigation or examination by the
director under this chapter. [1987 c.215 §12] The Director of the Department of
Consumer and Business Services may make such specific rulings, demands
and findings as may be necessary for the proper conduct of the business
regulated by this chapter and the enforcement of this chapter in addition
to and not inconsistent with this chapter. [Amended by 1985 c.762 §129] Subject to the provisions of
this chapter, the Director of the Department of Consumer and Business
Services may prescribe the form of the books and records to be kept by
the licensee. All such books and records shall be preserved and available
for at least two years after making the final entry on any loan recorded
therein. [Amended by 1985 c.762 §130] (1) A licensee may charge,
contract for and receive any interest or consideration for loans, secured
or unsecured, as agreed upon by the licensee and the borrower.
(2) When a precomputed loan contract is originally scheduled to be
repaid in 62 months or less and requires repayment in substantially equal
or consecutive monthly installments of principal and interest combined,
the interest or consideration may be precomputed, contracted for and
earned on scheduled unpaid principal balances on the assumption that all
scheduled payments will be made when due. In such cases, every payment
may be applied to the combined total of principal and precomputed
interest until the contract is fully paid, and the acceptance or payment
of interest or consideration on any loan made under the provisions of
this subsection shall not be deemed to constitute payment, deduction or
receipt thereof in advance. Such precomputed interest or consideration
shall be subject to the following adjustments:
(a) When a default of more than 10 days in the payment of any
scheduled installment occurs, the licensee may charge and collect a
default charge not exceeding five percent of the unpaid amount of the
installment or $5, whichever is less. A default charge may be collected
only once on an installment, but may be collected at the time it accrues
or at any time thereafter. No default charge may be assessed with respect
to an installment which is paid in full on or within 10 days after a
scheduled installment due date when an earlier maturing installment or a
default or deferral charge on an earlier maturing installment may not
have been paid in full even though all or part of such installment
payment is applied to an earlier maturing installment, or a default or
deferral charge.
(b) If the payment of all unpaid installments is deferred one or
more full months, and if the contract so provides, the licensee may
charge and collect a deferral charge not exceeding the annual percentage
rate previously disclosed to the borrower pursuant to the Federal
Consumer Credit Protection (Truth-in-Lending) Act applied to the sum of
the installments deferred for the length of the deferral period. The
deferral period is that period in which no scheduled installment is
required to be paid by reason of the deferral. Such charge may be
collected at the time of deferral or at any time thereafter. A deferral
charge may not be made for the deferral of any installment with respect
to which a default charge has been collected, unless the default charge
is deducted from the deferral charge. If prepayment of the loan in full
occurs during the deferral period, in addition to any other rebate which
may be required, the borrower shall receive a rebate of the portion of
the deferral applicable to the unexpired months in the deferral period,
for which purpose a fraction of an unexpired month exceeding 15 days
shall be deemed to be a month.
(c) Upon prepayment in full of the unpaid balance of a precomputed
loan, a rebate of unearned interest or consideration shall be made as
provided in this paragraph. The amount of the rebate shall be not less
than the total interest contracted for to maturity, less the greater of:
(A) Ten percent of the amount financed or $75, whichever is less; or
(B) The interest or consideration earned to the installment due
date nearest the date of prepayment, computed by applying the simple
interest rate of the loan to the actual principal balances outstanding,
for the periods of time the balances were actually outstanding. For
purposes of rebate computations under this subparagraph, the installment
due date preceding the date of prepayment shall be considered to be
nearest if prepayment occurs 15 days or less after that installment date.
If prepayment occurs more than 15 days after the preceding installment
due date, the next succeeding installment due date shall be considered to
be nearest to the date of prepayment. In determining the simple interest
rate, the licensee may apply to the scheduled payments the actuarial
method, by which each scheduled payment is applied first to accrued and
unpaid interest or consideration, and any amount remaining is applied to
reduction of the principal balance.
(3) If the borrower agrees to perform certain duties to insure or
preserve the collateral and fails to perform those duties, the licensee
may pay for the performance of those duties and add the amounts paid to
the unpaid principal balance. A charge may be made for sums advanced, at
the rate provided for in the loan agreement.
(4) The loan contract may provide that after default and referral
the borrower shall pay the licensee for reasonable attorney fees actually
paid by the licensee to an attorney not a salaried employee of the
licensee. [Amended by 1955 c.71 §13; 1971 c.450 §3; 1973 c.428 §4; 1975
c.567 §2; 1977 c.432 §1; 1979 c.326 §3; 1979 c.879 §7; 1981 c.412 §15;
1981 c.910 §8a](1) As used in this section and ORS
725.347, “open-end loan plan” means a plan or arrangement, the agreement
for which expressly states that it is made pursuant to this section under
which loans are made, and under which:
(a) The licensee may permit the borrower to obtain advances of
money from the licensee from time to time or the licensee may advance
money on behalf of the borrower from time to time as directed by the
borrower;
(b) The unpaid principal balances and interest or consideration are
debited to an account;
(c) Interest or consideration is calculated on the unpaid principal
balance in the borrower’s account from time to time, which balance may
include all advances made on behalf of the borrower and all charges
authorized under ORS 725.340 and this section; and
(d) The borrower has the privilege of paying the unpaid balance in
full or in installments.
(2) A licensee may make loans under an open-end loan plan and may
contract for and receive interest or consideration as provided in ORS
725.340.
(3) In addition to the interest or consideration permitted under
ORS 725.340, a licensee may contract for and receive on any loan such
additional charges as may be agreed upon by the licensee and the borrower.
(4) A security interest in real or personal property may be taken
to secure an open-end loan plan. Any security interest in real or
personal property shall be promptly released if there has been no
outstanding balance for 12 months and the borrower either does not have
or surrenders the unilateral right to create a new outstanding balance or
if the account is terminated at the borrower’s request and paid in full.
(5) ORS 725.050 (2), 725.340 (2) and 725.360 (1), (2) and (4) do
not apply to any open-end loan plan.
(6) The open-end loan plan agreement shall contain the name and
address of the borrower and of the licensee and shall disclose the date
of the agreement, the method of determining the minimum periodic payments
which will be required to pay the initial and any subsequent advances,
the conditions under which interest or consideration may be imposed, the
method of determining the principal balance upon which interest or
consideration may be imposed, the method of determining the amount of the
interest or consideration, each periodic rate and the range of balances
to which each rate is applicable and the corresponding annual percentage
rate in accordance with Regulation Z promulgated by the Board of
Governors of the Federal Reserve System under section 105 of the Consumer
Credit Protection Act (15 U.S.C. 1604), and the nature of the security
taken.
(7) Except for an account which the licensee deems to be
uncollectible or with respect to which delinquency collection procedures
have been instituted, the licensee shall deliver or cause to be delivered
to the borrower, for each billing cycle at the end of which there is an
unpaid balance of more than $1 in the account or with respect to which
interest or consideration is imposed, a statement setting forth the
outstanding balance in the account at the beginning of the billing cycle,
the nature, date and amount of any subsequent advance during the cycle,
the amounts and dates of payments credited to the account during the
billing cycle, the amount of any interest or consideration debited to the
account during the billing cycle, each periodic rate and the range of
balances to which each rate is applicable and the corresponding annual
percentage rate in accordance with Regulation Z promulgated by the Board
of Governors of the Federal Reserve System under section 105 of the
Consumer Credit Protection Act (15 U.S.C. 1604), the balance on which the
interest or consideration was calculated, a statement of how that balance
was determined, the closing date of the billing cycle, the outstanding
balance on that closing date and the minimum monthly payment required.
[1977 c.522 §2; 1981 c.412 §16; 1983 c.37 §36d; 1985 c.370 §2] (1) As used in this
section, “open-end credit card plan” means an open-end loan plan under
which:
(a) The licensee issues one or more cards, checks, letters of
credit or other devices to the borrower; and
(b) The borrower may obtain advances from the licensee, either
directly or in connection with purchases of goods and services, by using
the card, check, letter of credit or other device.
(2) A licensee may transact business and extend credit to borrowers
under an open-end credit card plan. A licensee may offer an open-end
credit card plan in conjunction with noncredit features or services
available to the borrower through use of the card or other device. The
noncredit features or services shall not be subject to regulation under
this chapter.
(3) The agreement between the licensee and the borrower relating to
the open-end credit card plan shall conform to the requirements of ORS
725.345 (6), except that the borrower’s name and address and the date of
the agreement need not be included in the agreement if the borrower has
submitted a signed and dated application to the licensee seeking the
issuance of one or more cards or other devices. [1985 c.370 §4]
On and after September 20, 1985, ORS 725.210 applies to loans and
advances pursuant to ORS 725.345, provided that a licensee that applied
for and received a license before September 20, 1985, for a location
outside the State of Oregon may receive and hold one or more licenses
relating to locations outside the State of Oregon, including one
additional license for a location not licensed on or before September 20,
1985, and may transact business at such licensed locations. With respect
to such a licensee only, loans and advances under open-end loan plans or
open-end credit card plans shall be considered to be business transacted
where the applications or agreements in connection with the loan plans or
credit card plans are approved by the licensee. [1985 c.370 §1a](1) As used in this section, “earnings” means salary, wages or
other compensation for service.
(2) No licensee shall take an assignment of earnings as payment of
or as security for payment of a loan. An assignment in violation of this
subsection is unenforceable by the assignee and revocable by the
assignor. Nothing in this subsection is intended to prevent an employee
from authorizing deductions from the earnings of the employee if the
authorization is revocable.
(3) For the purpose of this section, a sale of unpaid earnings made
in consideration of the payment of money to or for the account of the
seller of the earnings is considered a loan to the seller, secured by an
assignment of earnings. [1971 c.232 §3] Every licensee shall:
(1) Deliver to the borrower at the time any loan is made a
statement in the English language showing in clear and distinct terms:
(a) The name and address of the borrower and of the licensee.
(b) The amount and the date of the loan and of its maturity or
terms of payment.
(c) The rate of interest agreed upon or consideration to be charged
therefor.
(d) The nature of the security for the loan, if a lien on personal
property has been taken by chattel mortgage, bill of sale, collateral
agreement or otherwise.
(2) Make available to the borrower upon request a plain and
complete receipt for all payments made on account of any such loan at the
time such payments are received by the licensee, specifying the amount
applied to interest, if any, the date to which the interest is paid, the
amount applied to principal, if any, and the unpaid principal balance of
such loan, if any remains.
(3) Permit payment to be made in advance in any amount on any loan
at any time.
(4) Upon repayment of the loan in full or upon renewal thereof,
mark indelibly such obligation signed by the borrower with the word
“Paid” or “Renewed.” In the case of repayment in full the licensee also
shall do the following:
(a) To the extent and in the manner required by law, release any
mortgage or security agreement that no longer secures a loan, and restore
any security or collateral.
(b) Release any Uniform Commercial Code filing that no longer
secures a loan, to the extent and in the manner required by ORS 79.0513.
(c) Return any assignment given by the borrower.
(d) Return to the borrower the canceled note evidencing the loan or
alternatively, acknowledge in writing to the borrower that the loan has
been repaid. [Amended by 1971 c.450 §4; 1973 c.428 §5; 1975 c.567 §3;
1987 c.650 §17; 2001 c.445 §182]Note: For transition provisions regarding secured transactions, see
notes under 79.0628.Loans made or payable in other jurisdictions and lawful where
made or payable, are not affected by this chapter. [Amended by 1979 c.88
§42](1) A director or officer of a licensee who has
reason to believe that a defalcation has occurred at any office of the
licensee shall give the information to the appropriate local, state or
federal law enforcement officer having jurisdiction of the violation.
(2) A licensee shall notify the Director of the Department of
Consumer and Business Services of any defalcation that occurs at any
office of the licensee within five days after the discovery of the
defalcation. When directed by the director to do so, the licensee shall
cause an audit to be made of the business of the licensed office where
the defalcation occurred, in accordance with the director’s instructions.
[1979 c.88 §38; 1987 c.650 §18]If the Director of the Department of
Consumer and Business Services has reason to believe that a defalcation
has occurred at an office of a licensee, the director may give the
information concerning the violation to the appropriate federal, state or
local law enforcement agency having jurisdiction of the violation. This
section does not apply, however, if the licensee has reported the
information to the appropriate law enforcement officer under ORS 725.385.
[1979 c.88 §40; 1985 c.762 §133] (1) The Director of the Department
of Consumer and Business Services may issue and serve upon the following
persons an order to cease and desist from a violation when the director
has reasonable cause to believe that the person to whom the order is
directed is violating, has violated or is about to violate any provision
of this chapter or a rule or order of the director:
(a) A licensee.
(b) A director, officer, employee or agent of a licensee.
(c) A person acting as a consumer finance lender without a license.
(2) An order under subsection (1) of this section must include the
following:
(a) A statement of the facts constituting the violation.
(b) A provision requiring the person named in the order to cease
and desist from the violation. The provision may be mandatory or
otherwise.
(c) The effective date of the order.
(d) A notice to the person named in the order of the right to a
contested case hearing under ORS chapter 183.
(3) An order under this section is effective 30 days after the date
of the order unless the person named in the order requests a hearing on
the order.
(4) An order under this section remains in effect until it is
withdrawn by the director or by a court.
(5) If an individual named in an order under this section fails to
comply with the order, the director may issue an order removing or
suspending the individual from the office or position held by the
individual. The removal or suspension is in addition to any penalty
provided by ORS 725.910 for failure to comply with an order issued under
this section. [1987 c.215 §13; 2005 c.338 §25] The Director of the Department of
Consumer and Business Services may institute any action or other
proceeding that the director considers necessary for enforcing any
provision of this chapter or any rule, order or action adopted, issued or
taken by the director under this chapter. [1987 c.215 §17] (1) In accordance with ORS
chapter 183, the Director of the Department of Consumer and Business
Services may adopt rules for the purpose of carrying out this chapter.
(2) In addition to the notice requirements of ORS chapter 183,
before the director adopts a rule, the director shall submit a copy of
the rule to each licensee. [1985 c.762 §110; 1987 c.650 §19] A
person may not be held personally liable for an act done or omitted by
the person in good faith and in compliance with a rule or order of the
Director of the Department of Consumer and Business Services under this
chapter regardless of whether the rule or order is later amended or
rescinded or is later determined by judicial or other authority to be
invalid. [1987 c.445 §6] 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.
(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. [2001 c.445 §197; 2003 c.359 §1] A lender
may not make a title loan to a consumer without forming a good faith
belief that the consumer has the ability to repay the title loan. In
forming a good faith belief, the lender shall consider factors adopted by
the Director of the Department of Consumer and Business Services by rule.
A lender that meets conditions adopted by the director by rule shall be
deemed to be in compliance with this section. [2001 c.445 §198] 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. [2001 c.445 §200; 2003 c.359 §2] A lender in the
business of making title loans may not:
(1) Include any of the following provisions in a title 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;
(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; or
(e) A clause permitting the continuation of interest after
repossession of the consumer’s motor vehicle, recreational vehicle, boat
or mobile home;
(2) Conduct a title 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 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) Require or accept from a consumer a set of keys to the motor
vehicle, recreational vehicle, boat or mobile home whose title secures
the title loan;
(5) Make more than one outstanding loan that is secured by one
title;
(6) Renew a loan that is secured by one title more than six times
after the loan is first made; or
(7) Make a new loan, secured by a title, to a consumer on the same
day that a previous loan, secured by the same title, expires if the
lender has renewed the previous loan six 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. [2001 c.445 §199](1) A lender in the business of making title loans shall
include in every title loan contract a notice, printed in type size equal
to at least 12-point type, stating that the consumer or the consumer’s
attorney may file a complaint with the Director of the Department of
Consumer and Business Services as provided in this section.
(2) Any person claiming to be aggrieved by a practice that violates
a provision of ORS 725.605, 725.610 or 725.615 or any rule adopted under
ORS 725.625, or the person’s attorney, may file with the director 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.
(3) After the filing of a complaint under this section, the
director may cause an investigation to be made under ORS 725.310. [2001
c.445 §201] 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. [2003 c.359 §4] (1)
A person claiming to be aggrieved by a practice that violates ORS
725.622, 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. [2003
c.359 §5] In accordance with ORS chapter 183, the Director of
the Department of Consumer and Business Services may adopt rules for the
purpose of carrying out the provisions of ORS 725.600 to 725.625,
including but not limited to establishing contract terms, charges and
fees for title loans. [2001 c.445 §202]PENALTIES (1) The Director of the Department of
Consumer and Business Services may assess against any person who violates
any provision of this chapter, or any rule or final order of the director
under this chapter, a civil penalty in an amount determined by the
director of not more than $2,500. In addition, if a licensee commits such
a violation, the director may revoke the license of the licensee.
(2) Civil penalties under this section shall be imposed as provided
in ORS 183.745.
(3) Except as provided in subsection (4) of this section, all
moneys collected under this section shall be paid to the State Treasurer
and credited as provided in ORS 705.145.
(4) In addition to any other penalty provided by law, the director
may assess against any person who lends money without the license
required under this chapter a civil penalty in an amount equal to the
interest received that exceeds nine percent per annum. The director shall
pay all moneys collected under this subsection to the Department of State
Lands for the benefit of the Common School Fund. [1975 c.544 §59; 1981
c.412 §17; 1985 c.762 §134; 1987 c.215 §16; 1987 c.373 §70; 1991 c.734
§98; 2001 c.445 §203]
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