Portland Regulates Payday Lenders
Mary Jo Markle
Meet Maryann Olson. In order to pay for orthopedic shoes, she took out a $100 loan from a pay day lender. To make her payments, Maryann had to take out a series other loans. The spiral of debt continued until Maryann owed high interest loans to six different pay day lenders. Now, Maryann's entire paycheck goes to making rent and paying off her loans.
Maryann as well as a number of others offered their experiences as testimony at a City Council session Wednesday evening. The conclusion of session: unanimous Council approval for an ordinance that imposes regulations on pay day lenders. The ordinance requires pay day lenders to:
- obtain a $1500 permit
- allow for an opportunity to cancel a loan (by close of business the following day)
- require borrowers to pay 25 percent of their loan principal before renewing a loan
The Oregon Food Bank and ACORN (Association of Community Organizations for Reform Now) testified at the Council session as well as Commissioners from Troutdale and Gresham. Both those municipalities indicated that they will pass similar ordinances.
The Council session raised a number of questions about exorbitant interest rates (which are uncapped and regulated by the state legislature) and the need for short term, immediate loans. We'd like to hear your thoughts on these issues.
Read the cover ordinance
Newspaper articles:
- Payday lenders face stiffer rules
- No more blank checks for Portland's payday lenders
- In my opinion: The payday loan industry
- On payday loans, lawmakers roll over
- Portland may tighten up on payday loan stores
- Loans that come easy can go bad fast
Posted by Mary Jo Markle on February 24, 2006
(7) Comments | Permalink | TrackBack (0)
Filed Under Front Page, Good Government, Jobs & Economy
Comments by site visitors
Thanks to all of the Council members who voted to do something about this problem. I can't believe that loan sharking is still a viable business in Oregon. They have been allowed to suck the life out of those who can least afford it for far to long. I would also like to see a cap on the rate of interest payday loan places can charge.
Posted by: Sharron | Feb 28, 2006 10:52:23 AM
Time to get hammered for my thoughts again? Guess so, so here goes -
Sam, why do we need a nanny government? At what point do we make people responsible for their own actions? Did anyone FORCE MaryAnn to go to these lenders? To put it another way, if these lenders didn't exist, then what would MaryAnn do? Well, she'd have put off getting her orthopedic shoes until she had the money for them. She might have gone to a charitable or social works agency and tried to see if they could have helped her. Instead she chose to go - via her own free will - and get a loan that obviously she had difficulty paying back. It was a mistake, it sucks, it's not a pretty picture but it was also the result of her actions and her actions alone.
I feel for the lady's physical condition, I feel for the lady's monetary postition. However, I also know that I'm responsible for the debts I obtain. When I sign for a car loan, a home loan or a quick cash loan I know the rates, I know the pay back schedule and I know that I'M responsible to pay the money back. If I can't pay it back I don't take the money in the first place.
I should say that that code has me down to one credit card and virtually no debt - but that is MY choice; just like MaryAnn made HER choice.
I don't need a nanny government, I'm an adult, I'm responsible for myself.
Posted by: mmmarvel | Mar 1, 2006 1:59:59 AM
"if these lenders didn't exist, then what would MaryAnn do?"
Well, if these predatory usurers didn't exist, and didn't advertise all over television, maybe she would have been pointed toward an advance loan from a credit union or something. Such as:
http://unitusccu.com/loans/additional.php
Usury should be illegal. It is in the best interest of all of us that members of our community not be needlessly rendered bankrupt, or else they'll need those horrible public services from our nanny government like food assistance, and we'll all end up paying the penalty.
Posted by: Mitch | Mar 11, 2006 6:46:39 AM
Gee Mitch - thanks for those enlightening comments, funny how they sort of restated mine; but me thinks you tried to cast a bad light on it.
First - I STRONGLY doubt that she would have/could have gotten a loan from a credit union. The VAST majority of folks who go to pay day loan places can't/won't qualify for a loan at a CU or a bank ... or why else do you think that they are going to payday loan places????
Second, while you tried to cast going to a government agency or my suggestion that they might go to a government agency in a bad light - it's not the light that I put it in (you did that all by yourself). I'm glad that our government and various charity outfits can and do help in times of need. If MaryAnn was in a time of need she could have and maybe should have sought out such a service but she chose not to. Under your ideals you are taking away her choice? Why? Shouldn't she, shouldn't the vast majority of us (mentally impaired excepted) be responsible for our own actions? Or should we continue to have government limit our choices until ... whatever the government provides is our ONLY choice? Eh?
Posted by: Mmmarvel | Mar 14, 2006 5:29:55 PM
Placing a limitation on acceptable interest rates reduces us to a "nanny state"? And is a step leading to "continu[ing] to have government limit our choices until ... whatever the government provides is our ONLY choice?"
Complete nonsense as (I hope) even the poster understands, and it certainly isn't convincing. If you advocate a free-for-all in the marketplace, lets repeal any and all regulations. Maybe you get sickened by tap water, die on the highway, or are swindled by someone, but at least we won't have a nanny state.
Yes, CAP THE INTEREST RATES ON SHORT TERM LOANS. Otherwise money lending simply becomes theft at some point, and theft is and should be illegal. (Thank you, nanny state.)
Posted by: David | Mar 24, 2006 6:36:16 PM
No David, my posting wasn't nonsense, and you completely ignored the issue. At what point do we allow/force people to be responsible for their own actions???
The rules that you talked about (tap water and highway speed) are safety issues, loaning money isn't. One more point - you should look up your definitions before engaging in a
debate.
Theft is defined as:
the act of stealing; specifically : the felonious taking and removing of personal property with intent to deprive the rightful owner of it.
A loan is defined as:
money lent at interest.
Please note, there is nothing that says the interest rate has to be a specific amount. Also note that in the case of theft, there is no participation of the person from whom the theft occurs. In a loan, that person has to sign some papers and we GIVE the responsibility of understanding and taking care of his/her obligations.
Yes, we become more and more of a "Nanny State" anytime we limit our choices - when those choices don't necessarily involve life-and-death situations.
Posted by: mmmarvel | Mar 31, 2006 9:34:31 AM
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My thanks to City Commissioner Dan Saltzman for his leadership in bringing this proposal forward for City Council consideration.
Posted by: Sam Adams | Feb 25, 2006 3:42:03 PM