Oregon Payday Loan Law and Legislation
Payday lending is legal in Oregon.
Oregon has a $50,000 limit on payday loans offered in the state. The minimum loan term is 31 days; the maximum loan term is 60 days. The APR is capped at 36%, lenders cannot charge more than this amount. 2 rollovers are allowed. Criminal actions against borrowers are prohibited.
Oregon put an end to many payday lending businesses in the state in 2007 when it introduced a 36% interest rate cap, and further in 2015 by voiding the loan agreements made prior to that date by unlicensed lenders. As of today, the loan terms are pretty restrictive and there not many lenders operating in Oregon.
Oregon Payday Lending Statutes
Payday loan business in Oregon is regulated by the following state laws: Chapter 725 and Chapter 725A.
All lenders willing to give loans to Oregon residents (in-store and online ones) must be licensed to operate in the state. Currently, 7 Oregon-licensed lenders offer online loans.
A number of lenders have already lost licenses because they have violated state laws in terms of registration and licensing. These lenders cannot offer their services anymore in Oregon.
You can verify a payday lender license on the website of the Oregon Division of Financial Regulation
Loan Amount in Oregon
- Oregon sets a limit of $50,000 for a maximum loan amount (or up to 25% of borrower’s net monthly income when income < $60,000 annually.)
- There is no limitation to a number of loans that a person can apply for.
Rates, Fees and Other Charges in Oregon
In the state of Oregon, payday lenders may not do the following:
- Initiate or renew any payday loan at interest rates above 36%, excluding a single instance of origination fees for a new loan.
- Apply charges during a new payday loan, including loan renewals, of more than $10 per $100 loaned, like an origination fee, or $30, whichever is the lesser of the two.
- Apply charges to a borrower for fees or interest outside of those described within ORS 725A.060 (1) (c) or (d) Under 725A.064.
Real APR in Oregon can reach 154% for the average $300 payday loan (According to the Center for Responsible Lending 2019).
The Maximum Term for a Payday Loan in Oregon
- According to the state laws, the limit for loan term is 60 days while the minimum term is 31 days.
- In the state, there is also a law about a
cooling-offperiod: a person can apply for another loan only 60 days after the date when the previous loan was fully repaid.
- There should be a cooling-off period of 7 days between 2 consecutive loans.
- Loans can be rolled over twice in Oregon.
From July 2020, lenders are not required to check a borrower’s ability to repay a loan.
Be careful, evaluate your financial situation, don’t get into a debt trap.
The rule was changed by the CFPB.
- Lenders are forbidden to take any criminal actions against borrowers, civil trials, however, are legal.
- In case of the check return due to NSF, a fee of $20 is charged plus other bank charges.
To find the information about payday lenders of the state you may visit the Oregon Division of Financial Regulation or phone the Attorney General’s office.
Regulator: Complaints & Information
Oregon Department of Consumer & Business Services
Mailing Address: P.O. Box 14480, Salem, OR 97309-0405
Address: 350 Winter St NE, Salem, OR 97301
File a Complaint: https://www.oregon.gov/dcbs/consumer/Pages/consumer.aspx
Number of Oregon Consumers Complaints by Topics
According to CFPB Consumer Complaint Database
- Charges from account ( 57 )
- Fraud and threat ( 48 )
- Not exiting debt ( 40 )
- Credit rating ( 14 )
- Loan to return ( 13 )
- Lender is not available ( 9 )
- Not requested loan ( 5 )
- Loan not received ( 3 )
The Quantity of Top Oregon Stores by Cities
The History of Payday Loans in Oregon
- 1998 – Rev. Stat. § 725.340 Consumer Finance Act applied to payday loans. There was no cap on fees or limits on loan terms. Thus, fees ranged on average from $15 to $20 per $100, with APRs for 14-day loans of 391% to 521%. This situation didn’t change until 2007.
- 2006 – The Military Lending Act effectively capped payday loans offered to the military at 36% APR. This federal law has no exceptions, thus, no lender in Oregon is now allowed to offer loans to the military in excess of 36% APR.
- June-July 2007 – Oregon Legislature enacted payday loan rate-limiting regulations when the interest rate was capped at 36%, APR lowered to 156%, the minimum loan term extended to 31 days, and other restrictions were implemented. The measure led to the closure of more than two-thirds of Oregon’s payday loan stores.
- June 18, 2015 – Oregon SB 278 voided payday loans of $50,000 and less made by lenders without a license. As of that law, borrowers were not obligated to pay back loans to such lenders and any collection activities in such cases were rendered illegal. In the result, as of November 5, 2015, only 14 store lenders and 8 online lenders were officially licensed and could operate legally in Oregon.
- June 2, 2016 – The Consumer Financial Protection Bureau (CFPB) proposed a Payday Loan Rule that hasn’t yet fully come into effect (expected in November 2020).
- 2016 – According to the data collected from regulators, there were 66 licensed lenders in Oregon.
[Updated As of February 2020]