ORS Chapter 725 - Oregon Statutes

Chapter 725 — ConsumerFinance; Title and Payday Loans

 

2009 EDITION

 

 

CONSUMERFINANCE; TITLE AND PAYDAY LOANS

 

CREDITUNIONS; LENDING INSTITUTIONS; PAWNBROKERS

 

GENERALPROVISIONS

 

725.010     Definitions

 

725.015     Constructionof chapter

 

725.020     Shorttitle

 

725.045     Prohibitionon making certain consumer loans in course of business without license;application of license requirement

 

725.050     Prohibitedtransactions

 

725.060     Falseadvertising prohibited

 

725.110     Requirementthat licensee be qualified to conduct business in this state

 

LICENSING

 

725.120     Applicationfor license; annual fee

 

725.140     Issuanceof license; conditions

 

725.145     Disapprovalof application for license

 

725.150     Noticeof disapproval of application

 

725.160     Formof license; posting; transferability

 

725.185     Licensefees; fees for extra service

 

725.190     Reportof licensee; penalty for failure to report

 

725.210     Additionallicenses to same applicant

 

725.220     Changeof place of business

 

725.230     Revocationand suspension of licenses

 

725.235     Procedurefor license denial, revocation or suspension

 

725.250     Surrenderof license

 

725.260     Effectof revocation, suspension or surrender of license

 

725.270     Reinstatementof revoked license; fee

 

REGULATION

 

725.310     Investigationand examination by director

 

725.312     Inspectionand examination of licensees

 

725.315     Removalor suspension of officer of licensee

 

725.317     Removalof officer of licensee for reasons stated in ORS 725.145

 

725.319     Falseinformation in course of investigation or examination prohibited

 

725.320     Rulingsof director

 

725.330     Booksand records of licensee

 

725.340     Interestand other charges

 

725.345     Open-endloan plan; interest; security for plan; necessary disclosures

 

725.347     Open-endcredit card plan authorized

 

725.349     Applicationof ORS 725.210 to certain loans and advances

 

725.355     Prohibitionagainst assignment of earnings for loan security

 

725.360     Licenseeduty toward borrowers

 

725.370     Lawfulloans in other jurisdictions not affected by this chapter; exception

 

725.385     Dutyto give notice of defalcation to law enforcement officer, director; audit

 

725.395     Directorto give notice of suspected defalcation to law enforcement agency; exceptions

 

725.400     Ceaseand desist order

 

725.410     Enforcementactions

 

725.505     Rulemakingauthority; notice

 

725.510     Personnot liable for good faith acts or omissions

 

TITLEAND PAYDAY LOANS

 

725.600     Definitionsfor ORS 725.600 to 725.630

 

725.602     Loansmade to persons with Oregon domicile; application of chapter

 

725.605     Goodfaith belief in consumer ability to repay

 

725.610     Licenserequired for agent, broker or facilitator

 

725.615     Prohibitedactions by title lender

 

725.620     Filingcomplaint against title lender; notice; investigation

 

725.622     Prohibitedactions by payday lender

 

725.624     Filingcomplaint against payday lender; investigation

 

725.626     Effectof failure to obtain license; exceptions

 

725.630     Trackingoutstanding consumer loans; use of system; requirements for entering, updatingand retaining records; fees; rules

 

PENALTIES

 

725.910     Civilpenalties

 

GENERALPROVISIONS

 

      725.010Definitions.As used in this chapter:

      (1)(a)“Broker or facilitator” means a person that conducts a business in which, for afee or consideration, the person:

      (A)Processes, receives or accepts for delivery to a lender an application for aloan, individually or in conjunction or cooperation with another person;

      (B)Accepts and delivers to a lender all or most of the proceeds of a payment madein connection with a loan; or

      (C)Assists in making a loan in a material capacity other than as a lender.

      (b)“Broker or facilitator” does not include a mortgage broker or loan originator,as those terms are defined in ORS 86A.100, or an employee of a licensee.

      (2)“Consumer finance loan” means a loan or line of credit that is unsecured orsecured by personal or real property and that has periodic payments and termslonger than 60 days.

      (3)“Licensee” means a person licensed under this chapter. [Amended by 1985 c.762 §106;1987 c.373 §66; 1993 c.744 §26; 2007 c.603 §1]

 

      Note: The amendmentsto 725.010 by section 33, chapter 863, Oregon Laws 2009, become operative July31, 2010. See section 37, chapter 863, Oregon Laws 2009. The text that isoperative on and after July 31, 2010, is set forth for the user’s convenience.

      725.010. As used in thischapter:

      (1)(a)“Broker or facilitator” means a person that conducts a business in which, for afee or consideration, the person:

      (A)Processes, receives or accepts for delivery to a lender an application for aloan, individually or in conjunction or cooperation with another person;

      (B)Accepts and delivers to a lender all or most of the proceeds of a payment madein connection with a loan; or

      (C)Assists in making a loan in a material capacity other than as a lender.

      (b)“Broker or facilitator” does not include a mortgage broker, as that term isdefined in ORS 86A.100, a mortgage loan originator, as that term is defined inORS 86A.200, or an employee of a licensee.

      (2)“Consumer finance loan” means a loan or line of credit that is unsecured orsecured by personal or real property and that has periodic payments and termslonger than 60 days.

      (3)“Licensee” means a person licensed under this chapter.

 

      725.015Construction of chapter. Nothing in this chapter shall be construed or heldto limit the rights, powers or privileges granted to any person by any law ofthis state or of the United States whereby the loaning of money or extending ofcredit is regulated, provided that such person is operating in compliance withthe provisions of such law. [Formerly 725.040]

 

      725.020Short title.This chapter shall be known as the Oregon Consumer Finance Act. [Amended by1955 c.71 §1]

 

      725.025 [1955 c.71 §14;repealed by 1987 c.650 §21]

 

      725.026 [1955 c.71 §16;repealed by 1999 c.469 §7]

 

      725.027 [1955 c.71 §15;1985 c.762 §113; repealed by 1999 c.469 §7]

 

      725.030 [Amended by1955 c.71 §2; 1971 c.450 §1; 1973 c.428 §1; 1975 c.567 §1; repealed by 1981c.412 §9 (725.031, 725.036 and 725.041 enacted in lieu of 725.030)]

 

      725.031 [1981 c.412 §10(725.031, 725.036 and 725.041 enacted in lieu of 725.030); repealed by 1987c.215 §24]

 

      725.036 [1981 c.412 §11(725.031, 725.036 and 725.041 enacted in lieu of 725.030); repealed by 1987c.215 §24]

 

      725.040 [Renumbered725.015]

 

      725.041 [1981 c.412 §12(725.031, 725.036 and 725.041 enacted in lieu of 725.030); repealed by 1987c.215 §24]

 

      725.045Prohibition on making certain consumer loans in course of business withoutlicense; application of license requirement. (1) Without first obtaining alicense under this chapter, a person may not conduct a business in which theperson makes a loan described in subsection (2) of this section or acts as anagent, broker or facilitator for a person that makes a loan described insubsection (2) of this section, except as provided under ORS 82.010, 82.020 and82.025.

      (2)This section applies to loans of $50,000 or less that are:

      (a)Payday loans, as defined in ORS 725.600;

      (b)Title loans, as defined in ORS 725.600; or

      (c)Consumer finance loans.

      (3)This section does not apply to a person that does not collect a fee orconsideration in connection with a loan described in subsection (2) of thissection or an application for a loan described in subsection (2) of thissection and that:

      (a)Does not interact directly with a borrower or consumer;

      (b)Acts solely as an intermediary between the borrower or consumer and a lender ora person that conducts business as a broker or facilitator for a loan describedin subsection (2) of this section;

      (c)Transmits information, electronically or otherwise, concerning the borrower orconsumer to a lender or a person that conducts business as a broker orfacilitator for a loan described in subsection (2) of this section; or

      (d)Prepares, issues or delivers a negotiable instrument to a lender or a personthat conducts business as a broker or facilitator for a loan described insubsection (2) of this section for subsequent delivery to a borrower orconsumer. [1989 c.424 §2; 2007 c.603 §2]

 

      725.050Prohibited transactions. No licensee shall take:

      (1)Any power of attorney from any borrower, except a power of attorney toeffectuate the transfer of the ownership of any motor vehicle at the time ofmaking a loan on a motor vehicle.

      (2)Any note or promise to pay which does not accurately disclose the actual amountof the loan, the time for which it is made, the rate of interest charged or theschedule of payments agreed upon, or any instrument in which blanks are left tobe filled in after execution. [Amended by 1955 c.71 §3; 1971 c.450 §2; 1979c.88 §41; 1981 c.412 §13]

 

      725.060False advertising prohibited. No licensee or other person shalladvertise, print, display, publish, distribute or broadcast or cause or permitto be advertised, printed, displayed, published, distributed or broadcast inany manner whatsoever any statement or representation with regard to the rates,terms or conditions for loans which is false, misleading or deceptive.

 

      725.110Requirement that licensee be qualified to conduct business in this state. A license shallnot be granted to any person under this chapter unless the person is legallyqualified to conduct business in this state. [Amended by 1999 c.469 §1]

 

LICENSING

 

      725.120Application for license; annual fee. (1) Application for a license requiredunder ORS 725.045 shall be in writing in a form prescribed by the Director ofthe Department of Consumer and Business Services. The application shall containthe name and both the residence and business addresses of each individualapplicant, of each member of a partnership or association that applies for alicense and of each officer or director of a corporation that applies for alicense. The application shall also contain the county and city with street andnumber, if any, where the business is to be conducted and any other informationthe director may require.

      (2)An applicant, at the time the applicant applies for a license under thissection, shall pay to the director a license fee determined under ORS 725.185for the period terminating on the last day of the current calendar year. If thedirector denies the applicant a license for cause or if the applicant withdrawsthe application after the director investigates the applicant, the directorshall refund the license fee paid under this subsection, less an amount thatreflects the director’s administrative and investigative costs for theapplication. [Amended by 1955 c.71 §4; 1977 c.135 §49; 1985 c.762 §114; 2009c.541 §43]

 

      725.125 [1971 c.450 §5;repealed by 1973 c.428 §11]

 

      725.130 [Repealed by 1955c.71 §17]

 

      725.140Issuance of license; conditions. (1) Conditioned upon the applicant’scompliance with this chapter and the payment of the license fee, the Directorof the Department of Consumer and Business Services, within 90 days after thedate of filing the application referred to in ORS 725.120, shall disapprove theapplication or shall issue and deliver a license to the applicant to make loansin accordance with this chapter at the location specified in the application.However, before issuing a license, the director must first find uponinvestigation:

      (a)That the financial responsibility, experience, character and general fitness ofthe applicant, and of the members thereof if the applicant is a partnership orassociation, and of the officers and directors thereof if the applicant is acorporation, are such as to command the confidence of the community and towarrant the belief that the business will be operated honestly, fairly andefficiently within the purposes of this chapter; and