Department of Consumer and Business Services
Division of Finance and Corporate Securities
Previous Years' Legislative Summaries
These summaries are not intended to be a complete and detailed statement
of all applicable legislation. For a complete list of legislation, please
visit the Oregon Legislature's
Unless otherwise specified, the effective date of a bill is January 1 of
the year following its enactment. A bill may also have one or more operative
dates that apply to one or more sections of the bill, in addition to its effective
date. An operative date is the date on which the affected section or sections
Bills are identified by their bill numbers. SB indicates a Senate bill, HB
indicates a House bill. DCBS is the Oregon Department of Consumer & Business
2011 Regular Session
for consumer mortgage loan documents - HB 2083.
Personal information that is submitted by a consumer as part of a mortgage
loan application, and included in the examination files of a mortgage broker
or mortgage broker, is exempt from disclosure under the Oregon Public Records
Law. With proof of their identity, consumers are allowed to access to their
own loan documents if they are held in a DCBS examination file, and all such
documents may be released as part of litigation. (Chapter 350, 2011 Laws)
lending rulemaking advisory committees - HB 2084. Deletes the
requirement that the Department consult with an equal number of mortgage
bankers and mortgage brokers when using a rule making advisory committee.
Instead, it allows the Department to seek broad public input, including from
a variety of constituencies potentially affected by the rule, consistent with
the Administrative Procedures Act. (Chapter 351, 2011 Laws)
regulation of Appraisal Management Companies by the ACLB - HB 2499.
The Legislature adopted HB 3624 (2010) to require appraisal management companies
(AMC) to register with the Department of Consumer and Business Services (DCBS).
Under this law, an AMC is a business that performs appraisal management services,
administers networks of independent contractor appraisers to perform real
estate appraisal activity for clients, or otherwise serves as a third-party
broker of real estate appraisal activity between clients and appraisers. This
law transfers regulatory authority over AMCs from DCBS to Oregons appraiser
regulator, the Appraiser Certification and Licensure Board (ACLB). It also
revised the requirements to comply with minimum AMC registration standards
set in the federal Dodd-Frank Wall Street Reform and Consumer Protection Act
and to allow the pass-through collection of some federal fees. It also removes
the requirement that AMCs have a dispute resolution process and verify the
competency of individual appraisers. It also allows bank subsidiaries to do
business as an AMC without being registered and removes the requirement for
auditing each AMC every two years. The property, records, and unexpended fund
balances of the AMC registration program are transferred from DCBS to ACLB
by January 1, 2012. (Chapter 447, 2011 Laws)
for public funds - HB 2612. Banks and credit unions may accept public
fund deposits up to $250,000 insured by the Federal Deposit Insurance Corporation
(FDIC) or the National Credit Union Insurance Fund (NCUIF). They may also
accept public fund deposits above the insured amount if they also pledge collateral
that is sufficient to protect the funds. This law clarifies that this requirement
to pledge collateral applies only to the uninsured portion of
deposited public funds. (Chapter 25, 2011 Laws)
for large deposits of public funds - HB 2613. Under current law, an
Oregon bank must provide collateral for public fund deposits that exceed the
statutory limit. This law allows an Oregon bank to accept public funds that
exceed insured amount by redepositing these funds into insured accounts in
other financial institutions, if these funds will be insured and if the bank
receives an equal amount of deposits from the other financial institutions.
Oregon banks currently have authority to reciprocal deposit programs (such
as Certificate of Deposit Account Registry Service (CDARS) for funds from
individuals and businesses. This expands the options of a CDARS-type program
for funds from public entities. (Chapter 477, 2011 Laws)
estate owned by banks - HB 2614. Current law requires an Oregon chartered
bank to reduce the value of real estate it owns by at least 5% of its original
book value each year, beginning the year the title is vested with bank. This
law eliminates this reduction but requires real estate owned by the bank to
always be valued and recorded in the bank's books in accordance with Generally
Acceptable Accounting Principles (GAAP). The bill also reduces the time a
bank may hold such real estate to 10 years for real estate acquired by the
bank on or after the effective date (June 23, 2011).
for mortgage lenders, loan originators, certified providers, and master trustees
- HB 5014. ORS 291.055 requires legislative review and approval of
state agency fees that are established or increased during the interim. This
law sets DFCS fees for various mortgage lenders and loan originators, and
fees for master trustees, certified providers, and limited operations certified
providers. These fees are lower than those proposed by the Department through
administrative rules. The proposed fees originally took effect on July 1,
2010 (mortgage), and January 1, 2011 (preneed). (Chapter 618, 2011 Laws)
urging Congress to establish additional financial insurance system - HJM 10.
The Federal Deposit Insurance Corporation (FDIC) and National Credit Union
Share Insurance Fund (NCUSIF) provide insurance for deposits in banks and
credit unions. The current insurance limit is $250,000 per depositor.
Public funds deposits typically exceed this threshold and must be secured by collateral by the
institution. This joint memorial urges Congress and the President to enact legislation to assist
in establishing a voluntary system of full insurance for public funds accounts.
most historic cemeteries from private cemetery laws - SB 29. This
law allows historic cemeteries operated by a nonprofit organization to be
exempt from many of the regulations of ORS 97, including: regulations for
deposit of human remains; dedication, platting, survey and subdivision of
land to cemetery purposes; resurvey and alteration; and sales and rights in
respect of cemetery plots. (Chapter 162, 2011 Laws)
care deposits for grave liners - SB 30. Endowment care, perpetual
care, cemeteries deposit funds into a trust in order finance the future care,
maintenance, and preservation of the lots and grounds, and the upkeep of renewal
of the buildings and property that are part of the cemetery. Grave liners,
also known as burial vaults, are an optional container that is placed in a
grave to hold a casket and to help prevent the ground from caving in. Although
current law requires that such cemeteries deposit 15 percent of the gross
sales price of each grave sold and five percent of the gross sales price for
each niche, crypt, and private mausoleum to be placed in trust, there has
been no requirement for grave liners. This law requires endowment care cemeteries
to deposit at least nine percent of the gross sales price of a grave sold
with an installed grave liner and that graves sold without liners at the time
of sale must deposit at least 15 percent of the gross sales price. (Chapter
163, 2011 Laws)
protection and enhanced enforcement for manufactured structures dealers -
SB 85. Consumers who buy manufactured homes do not have the same protections
as consumer who buy traditional, site-built homes from mortgage lenders. This
law requires that the $40,000 surety bond dealers are required to hold must
be fully accessible to retail customers, rather than accessible by contractors
or other businesses. It also gives DCBS enhanced investigative authority and
authority to issue cease and desist orders related to regulation of sale of
manufactured structures. Requires manufactured structure dealers bond
or letter of credit be in form approved by the Director. (Chapter 166, 2011
to bank regulations - SB 92. Current law allows federally chartered
banks, or banks chartered in another state, to provide banking services in
Oregon if they purchase or merge with an existing bank or branch that has
operated in Oregon for at least three years. The federal Dodd-Frank Wall Street
Reform and Consumer Protection Act prohibits such requirements and require
states to make it easier for national banks and banks regulated by other states
to establish branches in any other state, including Oregon. This law eliminates
the current standard but allows DCBS to conduct an investigation comparable
to the current process used for evaluating a proposed bank merger or acquisition.
It increases the application fee for these bank applications to $2,500 (from
$500). It establishes protection for depositors ownership interest in
a nonstock bank, such as a federal savings bank, if they convert to an Oregon
stock bank. The measure also updates the current requirement that extranational
institutions (chartered by a sovereign country) to have Federal Deposit Insurance
(FDIC) insurance that complies with the $250,000 requirements of the Dodd-Frank
Act. (Chapter 263, 2011 Laws)
union operations and mergers - SB 177. This law makes several technical
and operational changes to credit union operations, including allowing board
meetings 10 times in separate months per year, rather than monthly, and giving
credit unions authority to appoint a credit manager instead of a credit committee.
It revises how credit unions invest funds not loaned to members. The amount
a credit union can invest in stocks, memberships, or loans to a corporation,
limited liability company or mutual association is increased from one percent
to five percent. The amount a credit union can loan to credit union service
association is increased from two percent to five percent. It establishes
criteria for credit unions to lend to their president or chief executive officer,
or officers with policymaking or credit approval authority. It allows credit
unions chartered under Oregon law to merge with credit unions chartered under
laws of another state in same manner as mergers between two credit unions
chartered under Oregon law. Finally, it creates a process for members to provide
input on a credit unions merger plans and provide information to fellow
members regarding their opposition to a merger proposal. (Chapter 327, 2011
2010 Special Session
and title loans - SB 993. This bill separated laws regulating
payday lenders and title lenders from those regulating traditional consumer finance lenders.
It didn't make any policy changes to the licenses for any such lenders. The law took effect on
passage - 03/04/2010. (2010 Or Laws ch. 23)
of tenants in foreclosed property - SB 1013. This bill clarifies that the existing requirement
that the trustee of a property in foreclosure must provide the notice of sale to residential
tenants of the foreclosed property and also prescribes the language of the required notice. It
exempts a purchaser of a foreclosed residential property at a trustee's sale from the obligation
to return a security deposit or prepaid rent to any tenant that has chosen to apply prepaid rent
or a security deposit to their rent obligation,. The law took effect on passage - 03/04/2010
(2010 Or Laws ch. 28)
of credit history for employment purposes SB 1045. The Job Applicant
Fairness Act limits use of credit history for employment purposes. With specific exemptions,
the bill makes it illegal for an employer to use information in the credit history of an applicant
for employment or for an employee, or to refuse to hire, discharge, demote, suspend, retaliate
or otherwise discriminate against an applicant or employee for a promotion, or related to the
compensation for or conditions of employment. Credit history is defined as any communication
of information by a consumer reporting agency that bears on a consumers creditworthiness,
credit standing, or credit capacity. The Bureau of Labor and Industries can take actions for
violations of this law and individuals can pursue a civil action in circuit court. The specific
exceptions from the bill are for financial institutions, public safety offices, and other employment
if credit history is job-related and use of the credit history is disclosed to the job applicant
or employee. The law will take effect on July 1, 2010. (2010 Or Laws ch. 102)
for loan modification - HB 3610. This bill revises the requirements of SB 628
(2009) that required notices to be sent to a borrower upon notice of default on a residential
trust deed with information about loan modifications. That law also required a trustee to record
an affidavit that they had complied with these requirements. This bill specifies that the trustee
must file the affidavit at least five days before the date of a residential foreclosure sale.
If a lender determines that a borrower is not eligible for a loan modification, the bill requires
that the lender give the borrower an explanation of how the lender calculated that borrower was
not eligible. The bill also makes other technical changes. The law will take effect on 05/27/2010.
(2010 Or Laws ch. 40)
of appraisal management companies - HB 3624. The bill requires appraisal management companies
to register with the Department of Consumer and Business Services and file a $15,000 surety bond
or irrevocable letter of credit and the department may require applicants to provide fingerprints.
The bill prohibits appraisal management companies from attempting to influence appraisals or
substantively alter completed appraisal reports. The department must adopt rules to require appraisal
management companies to establish dispute resolution process and ahs authority to suspend or
revoke registration of and impose civil penalties on appraisal management companies. The law
took effect on 03/23/2010. (2010 Or Laws ch. 87)
pledge loans - HB 3629. This bill makes technical changes to pawnbroker laws. It clarifies
that a pledge loan renewal can be 60 days or longer. The bill changes the definition of a pledge
loan "renewal" to also include instances when a consumer pays a "portion"
of the principal, interest, and fees on the loan and accepts another pledge loan from the pawnbroker
on the same pledge item on the same day. It also clarifies that the grace period for a pledgor
begins 30 days after the mailing date, rather than delivery date, of a forfeiture notice send
via USPS mail for a loan of more than $500 but less than $1,500. The law took effect 03/04/2010.
(2010 Or Laws ch. 14)
of foreclosed property - HB 3656. When a homebuyer does not qualify for a single loan
to cover the purchase price of a home, the buyer may qualify for an "80/20" loan --
essentially two different loans secured by one property. Recent court cases have allowed the
junior creditor to sue for remaining deficiencies after the property has been sold at foreclosure.
This bill clarifies HB 3400 (2009) by preventing the holder of the second loan from suing for
restitution when: a second loan was part of the purchase or repurchase transaction as the loan
which is being foreclosed, and when the second loan was owed to or originated by holder of the
mortgage being foreclosed or its affiliate. It also clarifies language relating to a deficiency
action. Effective on 03/10/2010. (2010 Or Laws ch. 48)
unions public funds pool HB 3700. This bill allows credit unions to receive deposits
of public funds in excess of the federally-insured amount of $250,000, similar to the authority
for banks. It sets up a public funds pool, administered by the State Treasurer. The program apply
to public funds on deposit on or after January 1, 2013. (2010 Or Laws ch. 101)
Trade Practices Act extended to loans and extensions of credit - HB 3706. This bill includes
loans and extensions of credit in definition of what constitutes "real estate, goods or
services" for purposes of Unlawful Trade Practices Act (with the exception of pawnbroker
pledge loans which are still excluded). The Unlawful Trade Practices Act (ORS 646.605 to 646.656)
is Oregon's primary consumer protection law. It helps protect consumers from businesses that
fail to deliver all or a portion of goods or serves as promised, cause a likelihood of confusion
or misunderstanding about products or services, use deceptive representations or designations,
represent goods as meeting standards they do not, and making false or misleading representations
about products or services. The bill adds mortgage bankers, mortgage brokers, mortgage loan originators,
and consumer finance lenders. The bill requires the Attorney General to confer with the Department
of Consumer and Business Service regarding rulemaking and enforcement actions. (2010 Or Laws
2009 Regular Session
Certification of Sellers of Travel - SB 109. The bill eliminates a
voluntary certification for Associations of Sellers of Travel. The certification
was no longer used and there were no certified associations.
collection practices - SB 328. This bill allows the Attorney General
to enforce debt collection statutes and to investigate instances of unfair
debt collection practices, such as making threats or calling a borrower repeatedly
or at unreasonable hours.
unions - SB 438. The bill creates a new definition for "organization"
for defining a credit union field of membership. This allows a corporation,
limited liability company, or association, and its directors, employees, or
volunteers located in a geographic area to qualify as an organization. The
bill increases the maximum loan a credit union may make to member of the credit
unions' management without board of directors approval, from $25,000 to $100,000,
and limits the combined amount of loans to all such individuals to 10 percent
of the credit union's assets. The bill also makes several technical changes.
prevention - SB 628. This bill amends HB 3630 (2008 Session) regarding
foreclosure notifications. It adds a requirement that a lender or loan servicer
must notify a homeowner facing foreclosure of their right to request a loan
modification, including the opportunity for a meeting (face-to-face or by
phone) and requires the lender/loan servicer to assess whether the borrower
is eligible for a loan modification.
of exempt funds - SB 731. The bill provides garnishment protections
for exempt funds such as Social Security benefits, veteran's benefits, workers'
compensation benefits, and unemployment benefits. Consumers whose benefits
are directly deposited in their accounts will not be forced to go to court
to recover exempt funds since the funds won't leave the consumer's account.
in foreclosure - SB 952 (and Sec 1. HB 3004). These bills require
advance notice of the foreclosure proceedings and providing protections related
to leases and security deposits. The notice will provide information about
tenants' rights and assistance resources.
insurance transactions - SB 973. The bill provides additional protections
for consumers, particularly seniors, who buy additional life insurance for
the purpose of selling or transferring the policy to investors. It requires
additional disclosures, protects a consumer's personal financial and medical
information and bans certain types of life-settlement transactions.
lending practices - HB 2188. This bill prohibits lenders from making
negative amortization loans without regard to the borrower's ability to repay,
and requires mortgage bankers, mortgage brokers, and loan originators to verify
the borrower's income and assets on which the mortgage lender relies when
determining ability to repay such loans. It also prohibits a negative amortization
loan from having a prepayment penalty after the first 24 months.
The bill requires that when a lender advertises or solicits in a language other
than English, and conducts a significant part of the communication about a mortgage loan in that
language, the lender must provide the borrower with three translated disclosures: the federal
"good faith estimate" required by the Real Estate Settlement Procedures Act (RESPA);
the Truth in Lending Act (TILA) disclosures; and a statement explaining that the loan documents
will only be provided in English and advising the borrower to obtain assistance with any necessary
translations. The department will be providing translations of the required disclosures in Spanish,
Russian, and Vietnamese.
of mortgage loan originators - HB 2189. This bill authorizes Oregon
to participate in a national licensing system for mortgage loan originators
who work for mortgage bankers, mortgage brokers, and consumer finance lenders.
It allows the department to ensure that applicants for this license have met
education requirements, passed background and credit checks, following the
laws in other states, and are adequately covered by surety bonds. The bill
also provides protections for borrowers by allowing the department to enforce
updated federal laws regarding disclosures to borrowers and restrictions on
management services - HB 2191. This bill revises the current registrations
for debt consolidating and credit repair services to include a registration
requirement for all types of debt management providers, including debt settlement
companies and loan modifiers. It prohibits misleading advertising, requires
specific disclosures, limits fees that can be charged for these services,
prohibits upfront fees, and expands the authority for debtors the right to
regulation - HB 2199. This bill authorizes DCBS to enter into an information
sharing agreement with the Financial Crime Enforcement Network (known as "FinCEN"),
a division U.S. Treasury division; changes calculation and timing of the APR
limit for consumer finance lenders; eliminates 30-day posting requirement
for consumer finance license applications; separates fee rule making for banks,
credit unions, and consumer finance; and changes bank holding company reporting.
buyers exempt from registration - HB 2307. The bill allows a person
to buy debt to pursue collection of the debt without being registered as a
collection agency, as long as the debt buyer does not have any obligation
to pay any of the proceeds collected to the original debt holder. The bill
was intended to resolve outstanding uncertainties related to a 2004 bankruptcy
court decision [In re Krysl, 304 B.R. 425 (Or. 2004).
fees and notices - HB 2753. This bill authorizes a new fee of up to
$3 for replacing a lost, stolen, or destroyed pawn ticket; increases the storage
fee to 3%, with a new cap of $100; and clarifies that the $3 fee on a firearm
pledge loan may only be charged on new loans. It changes forfeiture notice
requirements and defines when a pledge loan is considered a "renewal."
It allows local governments that regulate pawnbrokers to impose up to $1.00
on each pledge loan (except for renewals) to pay for costs of administering
and enforcing local government tracking systems.
judgments after foreclosure - HB 3004. This bill prevents some lenders
that foreclosure on borrower with an 80/20 loan from collecting from the second
loan when the home sells for less than what the borrower owes. Prior to the
mortgage lending crisis, many homebuyers financed 80 percent of the purchase
price with a mortgage and trust deed and the remaining 20 percent with second
mortgage. However, such arrangements did not have the same protections under
Oregon's foreclosure laws as borrowers with a single mortgage loan. This protection
from deficiency judgments only applies when both loans were taken out at the
time of the purchase and are both held by the same lender.
2008 Special Session
of loan originators SB 1064. The bill was a recommendation from the Governors
Mortgage Lending Work Group. It addresses the actions of loan originators -- loan
salespeople who are employed by licensed mortgage bankers or mortgage brokers and directly negotiate
terms and conditions of mortgage loans with borrowers. The bill adds negligence or incompetence
to the current list of prohibited conduct by a loan originator. It allows the Department of Consumer
and Business Services to suspend or bar a loan originator from working for a licensed Oregon
mortgage broker or mortgage banker if the loan originator has violated Oregon mortgage lender
law, been dishonest or incompetent while conducting a transaction, or has failed to account for
all funds from a mortgage loan transaction.
The bill requires the Department to enhance its current online
information to provide consumers with a registry with at least 10 years of
information about loan originators, including justified complaints and any
enforcement actions that have been taken. It also requires mortgage bankers
and mortgage brokers to annually file information about their residential
mortgage lending activity with the Department.
of home mortgage loan foreclosure consultants and equity purchasers HB
3630. The bill was a recommendation from the Governors Mortgage
Lending Work Group. It adds protections for consumers at risk of foreclosure
by regulating both consultants who offer to help homeowners avoid
foreclosure, and equity purchasers who acquire a financial interest
in the property.
The bill requires foreclosure consultants to provide the
homeowner with a written contract that includes plain language disclosures;
limits the compensation such consultants can receive. It also prohibits foreclosure
consultants from taking an interest in a residence in foreclosure or default
where the consultant had a contract for services. The foreclosure consulting
contract must include a full description of services to be provided and the
total costs of the contract.
It also requires equity purchasers to provide the homeowner
with a written contract in plain language; it requires equity purchasers to
ensure the homeowner has the ability to buy back the home; it entitles the
homeowner to a share of proceeds if the home is re-sold quickly; and it requires
the transfer to take place in escrow. The homeowner has rights to cancel a
foreclosure consulting or an equity purchasing contract.
For those facing foreclosure, the bill will require the homeowner
to be sent a notice, in plain language, with information about how to stop
the foreclosure process; the amount needed to bring the loan current; and
sources of counseling and advice. It also will require commercial mortgage
lenders to provide a toll-free telephone number for the homeowner to get loan
delinquency and repayment information and for person-to-person consultation
to discuss the payment and loan term negotiation and modification options.
2007 regular session
enforcement - SB 119. The bill authorizes the Attorney General, with
the consent of the Director of DCBS, to investigate and prosecute violations
of the Oregon Securities Law in certain instances. The Attorney General will
be able to pursue alleged violations involving companies whose securities
are listed on the national stock exchanges or where the Attorney General is
also pursuing an investigation or litigation regarding unlawful trade practices,
racketeering, or antitrust.
annuities - SB 257. The bill makes variable annuities, currently regulated
as insurance, also subject to state securities regulation. The effect is to
create broader enforcement tools, and to give DCBS better ability to require
supervision of brokers who sell annuities.
theft protection - SB 583. The bill protects Oregonians from identity
theft by providing that those who own, maintain, possess or dispose of personal
data must safeguard that data from unauthorized use. Consumers must be notified
when their personal information is subject to a security breach. Every Oregonian
will have the right to request a security freeze on his or her credit file
maintained by a credit reporting agency, and to temporarily lift the freeze
for a period of time. Use and display of Social Security numbers is restricted.
DCBS is given the authority to enforce the law.
union service to the poor - SB 592. The bill allows a state-chartered
credit union that predominantly serves low-income members to receive a low-income
designation. With this designation, nonmembers may make deposits and hold
shares in the credit union and the credit union may accept secondary capital
accounts. The Director of the DCBS will set guidelines for determining whether
the credit union will qualify for this designation. The bill also limits the
fees credit unions can charge to cash checks, and allows credit unions to
sell checks, money orders, and other money transfer instruments to non-credit
of check-cashing businesses - HB 2202. The bill limits check-cashing
fees to the greater of $5 or 2 percent for checks issued by the federal government,
the State of Oregon, or the municipality where the check is cashed; the greater
of $5 or 3 percent for payroll checks and all other government checks; and
the greater of $5 or 10 percent for personal checks. The total fee for cashing
any check cannot exceed $100. The bill also establishes licensing requirements
for check-cashing businesses.
of payday lending - HB 2203. The bill extends Oregon's payday lending
laws to all paydays loans made to borrowers in Oregon, including Internet
lenders. In addition, the bill allows DCBS to implement and require payday
and title loan companies to participate in a statewide lender database to
ensure compliance with the rollover and seven-day wait limitations applicable
to these loans.
and interest rates on short-term title loans - HB 2204. The bill limits
interest rates and fees on vehicle title loans to match the caps on payday
loans (36 percent per annum), requires a minimum term of 31 days, and limits
loans to two renewals. The bill also prohibits a title lender from making
a new title loan to the same consumer within 7 days of the expiration of the
previous title loan. Title loans will include "sale-leaseback" arrangements.
pawnbroker regulation - HB 2220. The bill allows DCBS to determine
the frequency of examinations of licensed pawnbrokers, updates record-keeping
requirements, allows pawnbrokers to keep records electronically, eliminates
the residency requirement for pawnbrokers, and eliminates the requirement
that a license application be posted for 30 days before a license is issued.
The bill also allows a pawnbroker to redeem a pledge or provide a new pawn
ticket within five days of receiving notice from a customer that their pawn
ticket is lost, destroyed, or stolen.
education - HB 2584. The bill creates a task force to make recommendations
on how to improve civics and financial education in kindergarten through the
12th grade. The task force will report to the Legislature's interim education
committees by October 1, 2008, with a summary of findings and legislative
practices - HB 2864. The bill addresses a number of business practices
involving the sale of funeral-related items and services prior to the time
of need. Significant changes include reporting requirements for the purchase
and storage of merchandise, clarification about the termination and payout
of pre-need trust accounts, clarification of DCBS regulatory authority, and
miscellaneous definitions and clarifications of terminology used in these
finance and short-term loan interest rate and fee limits - HB 2871.
The bill caps interest rates for conventional consumer finance loans as well
as payday and title loans. Conventional loan rates are limited to an annual
percentage rate of 36 percent or 30 percentage points above the discount rate
on 90-day commercial paper, whichever is greater. The bill also restricts
fees that can be charged by payday and title lenders; regulates brokers or
facilitators of loans; and allows contract terms and other charges to be set
2006 Special Session
Bill 1105 Enrolled - SB 1105 impacts those consumer finance lenders
who make short-term unsecured loans to consumers repayable on the consumer's
next payday, and consumers who obtain those loans.
The bill makes the following modifications to current law:
- Limits the interest rate that may be charged on a loan or a renewal to
36% per annum
- Permits an origination fee to be charged on each new loan of no more than
$10 per $100 loaned
- Limits the lender's remedies for dishonored checks or insufficient funds
to a maximum fee of $20 per loan transaction plus any fee charged to the
lender by its financial institution
- Other than the interest and fees described above, prohibits charging a
consumer any fee or interest on a payday loan
- Sets a minimum term of 31 days for each loan or renewal of that loan
- Reduces from three to two the number of times a loan may be renewed
- Prohibits the lender from making a new loan to a consumer within seven
days of the expiration of a previous payday loan
- Disallows seeking or recovering statutory damages and attorneys fees for
a dishonored check under ORS 30.701
These modifications apply to payday loans made or renewed on or after July
The Director of the Department of Consumer and Business Services is given
authority to adopt rules to carry out and enforce these modifications.
The Division of Finance & Corporate Securities sponsored five pieces
of legislation during the 2005 session.
of franchise statutes - SB121 - The Division of Finance and Corporate
Securities (DFCS) regulates the offering and selling of franchises in Oregon.
Currently, the only enforcement tool available to DFCS is a civil lawsuit.
This bill would provide greater protection to consumers by giving DFCS the
authority to use quicker and less costly remedies by issuing cease and desist
orders and civil penalties to deter violations.
Update - 6-29(S) Governor signed.
powers for non-depository programs - SB120 - DCBS regulates a number
of nondepository financial institutions such as collection agencies, consumer
finance companies, mortgage lenders, and pawnbrokers. The enforcement tools
available to DCBS vary in these programs. This bill will provide greater consumer
protection by giving DCBS the authority to issue subpoenas and cease and desist
orders for all non-depository programs, and to collect the costs of investigation.
Update - 6-29(S) Governor signed.
of DFCS non-depository registration provisions - HB2173 - The electronic
(digital) signature statutes give DCBS the authority to certify persons who
issue digital certificates. The intent of the statutes was to enhance the
use of the Internet by proving an assurance that the person who signed the
document is the person he or she claims to be and that the document has not
been altered. Because participation in the program is voluntary and the use
of encryption systems has replaced whatever need that existed to certify entities,
this program should be eliminated.
This bill also eliminates registration provisions for international trade
consultants who assist private businesses, promote Oregon products, and assist
businesses in dealing with international law and markets. There is no enforcement
authority and registration is voluntary. There currently is only one registrant.
Update - 6-29(S) Governor signed.
on escrow impounds - HB2153 - Lenders are required to pay interest
on escrow impounds from real estate borrowers intended to cover property taxes
and insurance. The interest rate is currently tied to a listing by the Federal
Reserve that has been discontinued. This bill revises the statute to replace
this reference to the interest rate as published by the U.S. Treasury, Bureau
of Public Debt.
Update - 3-11(H) Governor signed.
Capital Corporation repeal
- HB2161 - In 1987 the Oregon Legislature created a mechanism to help
generate a find for risk capital investments to stimulate the Oregon economy.
Because the finding never occurred, the Oregon Capital Corporation was never
formed by its August, 1989 deadline. Therefore, this statute is obsolete and
should be repealed.
Update - 5-25(H) Governor signed.
The following are proposed legislative concepts that the division of finance
and corporate securities sponsored during the 2005 legislative session.
Securities Law Update -
LC-359 - Authorizes Director of Department of Consumer and Business
Services to issue cease and desist order and to impose civil penalty for improper
conduct in franchise transactions.
The Oregon legislature passed several bills affecting the industries regulated
by the Division of Finance and Corporate Securities during its 2003 regular
session. Lawmakers addressed a variety of issues ranging from licensing loan
originators to raising securities fees to the national midpoint.
2711A - Modifies provisions relating to child support payments by
collection agencies. This bill increases the fee that a private collection
agency may charge for collecting child support obligations from 20% of each
support payment to 29% and requires the collection agreement be printed in
at least 12-point type that provides information on the fees and penalties
in the contract and the length of the contract and how the contract could
be terminated. The bill eliminates the provision that requires the obligor
to renew every six months the use of a collection agency.
159A - Payday lending - Incorporates existing administrative rule
provisions relating to payday loans, similar to relating to title loans enacted
in the 2001 Legislative session. This bill will provide regulatory parity
between the two types of short-term lending activities.
HB 2682A - This bill requires criminal background checks of loan
originators and requires DCBS to adopt rules specifying the categories of
criminal convictions that will prevent a person from acting as a loan originator.
The bill also requires insurance agents and insurance consultants who are
employed full time as loan originators to comply with loan originator training,
examination, and continuing education requirements.
248 - Pawnbroker Regulation - Provides that only the form of a surety
bond be approved by the Department of Justice rather than each individual
bond for the Pawnbroker program; and deletes the mandated annual examination
of pawnbrokers in favor of a biennial field examination supplemented by off-year
filings by each licensed pawnbroker. These amendments are consistent with
instructions of the 2001 Legislative Assembly to reduce the cost of pawnbroker
199 - Pre-Need Funeral Trusts Bonds - This bill removes an exception
in existing law governing a person with a claim against a letter of credit
or surety bond for certain providers of prepaid funeral services. The bill
does not change policy but removes a paradox in statutory construction, which,
if strictly followed as worded, deprives persons of a right of action against
an endowment cemetery's bond or letter of credit intended to protect consumers
in the first place.
SB 200A - Pre-Need Funeral Plan Law Clarification - Requires annual
reports from master trustees as well as providers of pre-need plans; requires
master trustees to pay the costs of exams; extends the law to cover providers
and trustees doing business without having secured the requisite certification
or registration; permits the director to suspend or revoke certificates and
registrations of insolvent providers and trustees; makes the director's referrals
to local and federal law enforcement authorities discretionary instead of
mandatory; and, creates criminal sanctions for providers and master trustees
who misuse trust funds.
194 - Securities Law Update - Deletes obsolete references to securities
registration and licensing covered under federal law; deletes confusing references
to securities licenses of persons employed by mortgage brokers and bankers,
and clarifies language in securities licensing provisions to provide that
investment advisor representatives, broker-dealers and salespersons are subject
to comparable treatment under the law. This bill cleans up technical problems
but makes no substantive changes.
3656 - Requires Director of DCBS to adopt rules setting fees
for registration of securities and licensing of broker-dealers, investment
advisers, and salespersons at the national midpoint for such fees.