(1) A
licensee:
(a) Must calculate daily interest
based upon a 365/day year.
(b) Must
comply with the Equal Credit Opportunity Act,
15 USC §
1691 et seq., and must provide the applicant
with a written notice of the reason for declining a loan. The license may
provide the notice to the applicant at the time the loan is declined or the
notice may be mailed to the applicant. The licensee must retain a copy of the
notice in the borrower's files unless an exception under the Equal Credit
Opportunity Act applies.
(c) Must
prominently post the APR inside their office where customers can easily see it
and the APR must be prominently posted on the licensee's website so that it
will be viewed by any Oregon consumer prior to applying for a loan.
(2) After any payment made, in
full or in part, on any loan, a licensee must:
(a) Give the person making payment a signed,
dated receipt showing the amount paid to principal, the amount paid to
interest, and the balance due on the loan; or
(b) An electronic receipt, a canceled check,
or other written instrument approved by the director as a substitute for the
receipt requirements of subsection (a).
(3) If a licensee does not give a borrower
the note marked "Paid or Renewed" in compliance with ORS
725A.056, the loan agreement
must state that the borrower's canceled check will be evidence of payment of
the loan. The licensee must mark the note "Paid" or "Renewed" and retain the
note in the file. If the loan is made using an electronic medium and the
consumer has consented to use of electronic transmission, an electronic
transmission may fulfill the requirements of this section.
(4) A licensee may not make a loan to an
applicant without forming a good faith belief that the applicant has the
ability to repay the loan. A licensee will be presumed to have complied if the
licensee:
(a) Requires the applicant to
provide evidence of a source of funds to repay the loan such as pay stubs, bank
statements or similar record or evidence of employment or income;
(b) Establishes the amount of salary or
earnings of the applicant and the date of the month on which the applicant
receives compensation or funds;
(c)
Solicits the applicant for information on the number, amounts and dates of
maturity on outstanding loans on which the applicant is the payor or
guarantor;
(d) Does not lend more
than 25 percent of the consumer's monthly net income to an applicant that earns
$60,000 a year or less. This limitation does not apply to loans made to
applicants who have a net income in excess of $60,000 a year. If a loan is
based upon anticipated receipt of funds from other sources, the licensee must
so note in the file and may lend no more than 25 percent of the total
anticipated funds received by the applicant during the loan period.
(e) Solicits information on the number,
amount and dates of maturity of existing outstanding loans.
(5) When an application is made, a
licensee must provide the borrower with a written statement, in a form approved
by the director, clearly describing the results of any default or late
payment.
(6) In compliance with ORS
725A.062 and
725A.064, a licensee may not
renew a loan more than two times and may not make a new loan to a borrower
within seven days of the day that a previous payday loan expires.
Example: A borrower borrows $300 for 31 days on July 3 at 36
percent interest and a $30 origination fee. Unable to pay off the loan on
August 3, the borrower pays the $30 origination fee and $9.17 interest ($300 x
0.36 divided by 365 x 31) and renews the loan with a new due date of September
3. Unable to repay the loan on September 3, the borrower again pays
$9.17interest and renews the loan with a new due date of October 4. If the
borrower is unable to repay the loan on October 4, the lender may not any more
renewals and may not make a new loan to the borrower until October 11.
(7) If the licensee has a
preexisting business relationship with the borrower in which the licensee has
entered into a loan or loans within the previous 12 months that have been
satisfactorily repaid in full, the lender may rely on that preexisting
relationship to form the good faith belief required under ORS
725A.062.
(8) For purposes of the investigation
described in ORS
725A.024, an applicant for a
payday loan license or title loan license must authorize an investigative
consumer report as defined in the Fair Credit Reporting Act,
15 USC §
1681 et. seq.
(9) No license will be issued or renewed
unless the applicant or licensee is legally qualified to conduct business in
this state by making appropriate filings with the Secretary of State.
