Keep lid on payday loans.

Byline: The Register-Guard

It's almost amusing listening to payday loan businesses whine that they're going to be squeezed out of business by long-overdue limits approved in a special legislative session last month. The new law is far more lenient than the piratical terms that payday lenders have given customers for years and that were made possible by Oregon's hands-off approach to commercial loan-shark- ing.

A dose of perspective is in order.

The payday loan industry has continued to survive - and grow - in many states that have acted to protect citizens from exorbitant interest rates and predatory terms. The laughable outrage of payday lenders, which will intensify as next year's legislative session nears, is aimed at persuading state lawmakers to weaken or eliminate the new restrictions.

Until last month, Oregon was one of only 16 states that imposed no meaningful limits on the payday loan industry, which made a habit of doling out campaign contributions to key leaders in the Legislature. After payday loan reformers mounted a signature campaign to put an initiative measure on the fall ballot - and after House Speaker Karen Minnis found herself facing a tough election battle against an opponent who called for payday loan reform - the Legislature agreed to a modest cap on interest rates at last month's special session.

Meanwhile, a growing number of cities across the state have passed their own laws limiting payday lenders. On Wednesday, the Eugene City Council voted 7-0 to draft an ordinance similar to ones passed earlier this year in Portland, Gresham and Troutdale.

While only the state can set interest rates, the cities have approved restrictions that help protect payday loan customers. They include requirements that lenders give borrowers a payment plan without any financial penalty when they have difficulty repaying loans. Borrowers are also guaranteed the right to cancel loans within 24 hours, and lenders cannot roll over loans before they've collected at least a fourth of the principal.

The local ordinances provide protections that were not part of the state's payday loan law, which regrettably won't take effect until July 2007. They also ensure that at least some protections would remain in place if lawmakers are foolish enough to weaken or eliminate the new law and unleash an initiative campaign that would give state voters the final say.

Other cities in Lane County should follow Eugene's lead. Doing so would not only protect Oregon's poorest and neediest citizens, but it would also send a clarion warning to lawmakers that they shouldn't mess with the new payday loan law.