Payday loans in Oregon
Oregon is the ninth largest state and has a population of over 4 million. The capital city is Salem where the government is the largest employer. The city is also a center for farming communities and although it has a diverse economy, one of the most important drivers of wealth is agriculture.
Residents in Oregon have a median per capita income of $29,117 and this compares favorably with the national average. So, the question arises of whether payday loans are essential to the people who live in this relatively wealthy state.
Legislators have put into place regulations for payday loans but these are not especially strict and as a result there are a relatively large number of lenders in the state. Before we look at the specific regulations relating to payday loans it is worthwhile learning a little bit more about Oregon and the people who live there.
The Beaver state
Located in the far north western region of the US, Oregon was originally a territory and entered into the Union in 1859 as the 33rd state. Covering over 98,000 square miles, Oregon is the ninth largest state and the 27th most populous.
The states bordering Oregon are the rich ones including Washington, Nevada, California and the Pacific Ocean is the fourth border. The name Oregon has Spanish origins and the state nickname the ‘Beaver State’ originated in the 19th century when fur hats were the height of fashion and the rivers in Oregon were stocked with beavers. Some of the earliest immigrants were trappers from Europe who made considerable amounts of money by trapping and selling beavers so that the rich people of Europe could have their luxury fur coats and hats.
The Economy of Oregon
Agriculture, forestry, fisheries and tourism play a large part in the economy of Oregon. This is the 25th wealthiest state in the US and the diverse regions are ideal environments for farming, producing timber and the salmon fishing industry.
Tourism is another strong industry and the natural mountain features and waterfalls, beaches and lakes are sought after locations.
Tourism is another strong industry and the natural mountain features and waterfalls, beaches and lakes are sought after locations for the thousands of visitors who arrive each year. One other industry that is growing is technology and many well known companies are based in the area known as Silicon Forest. These include Intel, Hewlett Packard and Xerox.
Important employers in Oregon
The three largest employers in Oregon is a combination of three health services but the largest individual employer is Intel which has over 17,500 employees. Nike is another well known name although this company recently announced some large job cuts scheduled for late 2017.
The latest unemployment figure for Oregon stands at 3.8% which is lower than the average in the US and a record low for the state. However, the poverty rate still stands at 16.7% and this is higher than in many other states.
There is no sales tax in Oregon although some cities levy their own taxes. In addition, the corporate tax is low at $150 per year and this has been a major factor in attracting large businesses to invest into the state. These background facts are interesting and there are anomalies between the rich residents and those on low incomes. This helps to put into context the regulations that relate to payday loans in Oregon.
Cash advances, check loans and payday loans
Payday loans are legal in Oregon and are also known as cash advances or check loans. The regulator overseeing the loans is the Oregon Department of Consumer and Business Services. The regulations relating to payday loans is not strict. Nevertheless, there are fewer payday loan stores in this state than would be expected. This may be due to the wealth that is clearly a factor in attracting people to live there. Understanding how payday loans work is essential for anyone who is in a financial bind and below you can read the basic terms of short term loans.
Main terms of payday loans in Oregon
Terms for payday loans in Oregon do not state a specific amount that can be borrowed. Most payday loans are for small amounts and although the actual amount set down in the regulations is $50,000, the rules state that the money must only be used for personal, household or family expenses.
There is a borrowing limit of 25% of your gross salary if you earn less than $60,000 per year. Loans may run for a minimum of 31 days and a maximum of 60 days.
The maximum finance rate is capped at 36% but lenders may also charge $10 for each $100 borrowed up to a limit of $30. The charges for a $100 loan for 31 days works out at $13 and this is equivalent to 156% APR.
Limits of debt
Borrowers are not limited to a number of loans as long as the stated maximum amount is not exceeded. Lenders may issue two renewal loans and there is no limit on the charges for these extra loans to pay off the original.
There is a cooling off period of 7 days after the previous loan has expired. Lenders are not required to set up a repayment plan. The lack of meaningful regulations in Oregon leaves the borrower wide open to excessive interest charges with ongoing amounts of debt.
Limits of collection fees
Lenders can charge a one off $20 collection fee for non sufficient funds and may also add additional bank charges that have been incurred through non payment of the debt. No criminal action is allowed.
Statistics for payday loans in Oregon
The payday loans industry in Oregon is not as extensive as in some other states. The regulations put into place have helped to limit debts but not eliminate all of the practices that lead low income families to use this kind of high interest loan.
In 2013, there were over 33,000 borrowers who took out 131,757 loans and who paid out over $7,000,000 in fees and charges. The lack of capped fees resulted in overall interest rates up to 521% APR. The interest rate is capped but as the fees are included in the APR, the actual rate is far higher than most borrowers thought it would be. However, there are also consumers who are unhappy about the lack of access to payday loans as there are no other companies offering short term lending opportunities.
Lenders in Oregon
The Yellow pages lists 112 payday loan companies in Oregon and the top five businesses were charging between 456% APR and 651% APR. There are eight online lenders who advertise in Oregon but no state licensed online lenders. However, most licensed store lenders also have an online presence.
Customers using payday loans
During the period 2015 to 2016, 4.7% of the adult population in Oregon took out a payday loan. The average amount borrowed was $355. More women than men used loans and the age category that borrowed the most was the 25 to 29 group. Low income borrowers who earned up to $15,000 per year took out most of the loans and more renters used loans than homeowners. The majority of loan applicants were working in full time employment, 12% were unemployed and 3% were retirees.
Legislation for payday loans in Oregon
Payday loans are legal and are authorized under 54 Oregon Rev. Stat. § 725A.064. The regulator is the Oregon Department of Consumer and Business Services. The restrictions on loans have not helped to eliminate the debt trap that many low income families have encountered but they have helped to limit the damage that was previously done by predatory lenders.
Borrowers may cancel a loan free of charge as long as this occurs by close of business on the next working day after signing an agreement.
The interest rate is made higher by lenders who have used the lack of limits on fees to make profits on essential loans for families who have no where else to go for borrowing. However, the legislation does include some rights for borrowers and laws regarding lending practices. These are listed below.
Fees are capped at $10 per $100 up to a maximum of $30. Interest rates are capped at 36%. Maximum APR is capped at 153.77%. Only two renewals are allowed and then the loan must be paid off in full.
Regulations for lenders
Borrowers may cancel a loan free of charge as long as this occurs by close of business on the next working day following the signing of an agreement. Loans cannot be renewed unless the borrower has cleared at least 25% of the original loan. All lenders are subjected to an intensive background check and credit check authorization and lenders must have a license to operate and sell consumer finance loans.
Payday lenders – Competition in Oregon
The lack of competition has been one of the reasons why borrowers have been unable to get better deals on payday loans in Oregon. But, this looks likely to change soon as more online lenders are appearing in the financial market place.
Many families have a situation where they need urgent funds and using an online payday lender can be the answer to that need. But, it is important to stress that a payday loan should not be used regularly as a means of topping up your income.
Using an online lender is discrete and the process is totally confidential. Additionally, online borrowing is fast and the cash goes directly into your bank account. One word of warning. Try to avoid ‘no credit check’ online payday loans as these lenders are not licensed and will charge very high rates of interest.
Eligibility for a payday loan
All lenders will ask for certain proofs when you apply for a payday loan whether this is online or at a store. You need to show identification documents, a social security number and proof of regular income. In addition, you will need a checking account.
Store lenders ask for a post dated check for the sum of the loan and the interest charges. When repayment becomes due you can either go to the store to pay off the loan or the lender will present the check at the bank. With online loans the process is simpler. The lender deposits and withdraws the loan plus interest at the appropriate times. Borrowers must also be an American citizen or a permanent resident in the US.
Information and complaints
The regulator is the place to go for information about licensed payday lenders in Oregon and this is the organization where you can also make a complaint. The address of the regulator is
350 Winter Street NE, Room 410,
PO Box 14480,
Salem OR 97309.
You can also make contact by phone on 503-378-4140 or 866-814-9710 (toll free in Oregon). The regulator is there to protect your statutory rights.
Some alternative choices
If you are struggling to pay your everyday bills and cannot afford to get further into debt there are some other options available in Oregon. Three schemes are operating in the state that offer help. These are the Oregon HEAT, Temporary Assistance To Needy Families and the Supplemental Nutrition Assistance Program.
Payday loans in Oregon – Summary
The state of Oregon has some restrictive regulations for payday loans. These are designed to protect consumers from bad lending practices and predatory lenders. There is no maximum amount that can be borrowed other than the limit of loans to 25% of an income less than $60,000. The terms of the loan are also longer than some other states and loans can run for up to 60 days.
Although interest rates are limited, the longer terms of loans means that borrowers can end up paying excessive amounts in interest and charges. However, no lender can take out criminal proceeding for debts from payday loans.