Payday loans under fire for high interest charges.Byline: Jeff Wright Jeff Wright can refer to:
Payday loan A payday loan or paycheck advance is a small, short-term loan that is intended to cover a borrower's expenses until his or her next payday. Typical loans are between $100 and $1500, on a two-week term and have interest rates in the range of 390 percent to 900 percent companies in Lane County typically charge annual interest rates exceeding 500 percent, and frequently fail to conspicuously post those rates as required by state law, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. a study being released today by the Oregon Student Public Interest Research Group. "These loans are ripping (1) Converting an audio CD from its native CD-DA format to MP3, AAC or some other compressed audio format. When the term was coined, it had a perverse meaning. Many loved the idea they were "ripping off" the music industry by making copyrighted works available in a compact format off consumers," said Laura Etherton, the nonprofit A corporation or an association that conducts business for the benefit of the general public without shareholders and without a profit motive. Nonprofits are also called not-for-profit corporations. Nonprofit corporations are created according to state law. group's consumer advocate and the report's author. "The rates are all the same - staggeringly high." Industry spokesman Thom Shauklas, however, called the report misleading and inflammatory, and said payday loans are more properly viewed as fee-based rather than interest-accruing. Disclosing the annual interest rate on a payday loan, while legally required, "is as silly as asking a bank to disclose the (annual rate) of a $30 overdraft charge on a $10 check," said Shauklas, president of the Community Financial Services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. Association of Oregon. The OSPIRG OSPIRG Oregon Student Public Interest Research Group report, "Predatory Lending in Lane County," comes at a time when payday loan reform is the subject of possible action in the Legislature's special session next week, and of a citizen initiative campaign to refer a measure to Oregon voters in November. Meanwhile, several Oregon cities There are two places named Oregon City in the United States:
The press dubbed Piercy's election part of a "shift to the left" for the Eugene City Council. and Councilor coun·cil·or also coun·cil·lor n. A member of a council, as one convened to advise a governor. See Usage Note at council. coun Andrea Ortiz, is scheduled to discuss a possible ordinance May 17. Three cities The Three Cities is a collective description of the three fortified cities of Cospicua, Vittoriosa, and Senglea on the Island of Malta, which are enclosed by the massive line of fortification created by the Knights of St John, the Cottonera Lines. - Portland, Gresham and Troutdale - already have passed such ordinances. Four payday loan companies have since filed a lawsuit against Portland's law, saying it conflicts with state law regulating short-term lenders. The payday loan industry in Oregon has more than doubled since 2000, with 359 storefronts registered with the state at the end of 2005. All but three of the 31 storefronts in Lane County are in Eugene or Springfield. To get a payday loan, a consumer writes a personal check in exchange for cash. The lender cashes the check on the day the loan is due - typically after 14 days. If the consumer can't repay the loan, he can renew or "roll over" the loan up to three times - and pay a similar fee each time. OSPIRG decided to focus on Lane County after conducting a similar survey of payday outlets in Portland last summer, Etherton said. "We were hearing so much anecdotal evidence anecdotal evidence, n information obtained from personal accounts, examples, and observations. Usually not considered scientifically valid but may indicate areas for further investigation and research. that consumers were getting trapped in a cycle of debt, and we wanted to get more on-the-ground data," she said. The most common annual interest rate in Lane County was the same as in Portland - 521 percent, the report found. Rates ranged from 365 percent on a 30-day loan to 886 percent on a 7-day loan. About a dozen OSPIRG volunteers canvassed 26 storefronts last month to complete the survey, Etherton said. Other findings: The fee for a $300 loan, among the storefronts surveyed, ranged from $45 to $94.50, with $60 most common. The rollover A graphic element in an application or on a Web page that changes its color or shape when the pointer is moved (rolled) over it. See JavaScript rollover. See also n-key rollover. fee for a $300 loan ranged from $25 to $94.50, with $60 most common. Among the 26 storefronts surveyed, six did not have a conspicuous, easy-to-read posting of their annual interest rate, as required by law. Only three of the storefronts surveyed - Ace Cash Express, Advance American Cash Advance and Check N Go outlets in Springfield - run a credit check on borrowers. Ten of the 14 companies with storefronts in Lane County are based out of state. Locally based storefronts include Anydays Payday Online in Springfield, Ship N Chek in Eugene, and Speedy Cash in Eugene and Springfield. Increasingly, rent-to-own stores and auto title loan outfits are diversifying into payday loans. Locally, those include Rent-A-Center in Springfield and U.S. Title Loans in Eugene. The report offers several recommendations, including capping interest rates and fees, allowing installment payment plans, extending loan terms, limiting the number of rollovers and prohibiting the use of borrowers' postdated checks postdated check n. a check delivered now with a written date in the future, so that it cannot be cashed until that date. The danger to the recipient is that such a check is legally only a promissory note due at the later date, and if the account is closed or short . Shauklas, the industry trade group president, said payday stores already are regulated and audited, and have requirements of borrowers - such as holding a job and having a checking account. Many stores don't make credit checks, he said, because that runs counter to the industry's goal of providing quick, easy loans. Auditors are charged with making sure that stores post interest rates as required, Shauklas said. The failure of a handful of stores to post the rates is akin to isolated scofflaws found in any industry, he said. "We have a product with wide acceptance, limited complaints and educated consumers," he said. "I recognize our product is not for everybody, but I feel strongly that people need to have choices. It's important that they not be shackled by others saying, `I know what's best for you.' ' Critics, however, are unswayed Adj. 1. unswayed - not influenced or affected; "stewed in its petty provincialism untouched by the brisk debates that stirred the old world"- V.L.Parrington; "unswayed by personal considerations" uninfluenced, untouched by such comments, moving forward on local city ordinances as well as on the statewide ballot measure. Patty Wentz, communications director for Our Oregon, the group pushing the statewide measure, said she views the city measures as complementary to the initiative campaign. The issues are different because cities, by law, cannot cap interest rates. But they can require such things as installment payment plans, or partial loan repayments prior to a rollover. Eugene city lobbyist Jason Heuser said Eugene is looking at an ordinance similar to Portland's. Cities across the state are trying to use similar language, he said, to answer industry advocates' argument that a multitude of municipal laws would create a confusing patchwork of requirements. Portland's law allows rollovers only if the borrower has paid 25 percent of the original loan's principal and interest; a one-day window to cancel a loan; and installment payment plans. The state initiative, meanwhile, would cap annual interest rates at 36 percent; extend the minimum loan length to 31 days; and limit rollovers to two. In Salem, two Lane County legislators - Democratic Sen. Floyd Prozanski and Republican Rep. Debi Farr - have taken the lead on payday reform legislation. Gov. Ted Kulongoski Theodore R. "Ted" Kulongoski (born November 5 1940, in rural Missouri[1]) is an American Democratic politician. Since 2003, he has served as the Governor of Oregon. He was re-elected in 2006. on Tuesday reiterated that he would only support a payday reform law that is at least as stringent as the proposed ballot measure. He also said he wants to pursue legislation next year that would cap the fees that check-cashing stores charge for cashing paychecks and government checks. The actions are needed, he said, to help stem hunger among low-income Oregonians. PAYDAY LENDING IN LANE COUNTY Number of storefronts: 31 Number of companies: 14 Store locations: Eugene (16), Springfield (12), Cottage Grove Cottage Grove, village (1990 pop. 22,935), Washington co., SE Minn., near the St. Croix River; inc. 1965. There is farming (cattle, sheep, corn, and soybeans) and manufacturing (chemicals and machinery). (2), Creswell (1) Most common annual interest rate on 14-day loan: 521 percent Highest posted rate on 14-day loan: 548 percent Lowest posted rate on 14-day loan: 391 percent Highest posted rate: 886 percent, on 7-day loan - Oregon Student Public Interest Research Group MORE INFORMATION Attend news conference: Today, 11 a.m., Tykeson Room, Eugene Public Library, 100 W. 10th Ave. Speakers include Laurie Trieger of FOOD for Lane County, Pastor Tom Dodd of United Lutheran Church in Eugene, and OSPIRG consumer advocate Laura Etherton. On the Web: Full report available at 11 a.m. today at www.ospirgstudents.org or www.ospirg.org |
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