GOV. KULONGOSKI SIGNS INTO LAW CONSUMER PROTECTIONS ON FINANCIAL SERVICES

Gov. Ted Kulongoski, D-Ore., issued the following press release:

Citing the importance of ensuring all Oregonians have access to affordable financial services, Gov. Ted Kulongoski today signed four bills that cap the fees on check-cashing and consumer loans, reducing costs to consumers. "Unfortunately, far too often those who can least afford it to wind up paying the highest price for financial services - shortchanging their paychecks and sometimes creating an insurmountable cycle of debt," the Governor said. "Consumer protection - at its core - is about the principle of fairness and today I'm signing into law four bills to ensure that consumers are treated fairly in their financial practices." The consumer finance legislation builds on the Governor's leadership to win approval of a 36 percent interest rate cap on payday loans during the April 2006 special session. Three of the bills, HB 2002, 2203 and 2004 were identified as priorities by the Governor and pre-filed before the beginning of the session on his behalf. House Bill 2871 was spearheaded by House Speaker Jeff Merkley to provide a comprehensive cap on interest rates for all lending in Oregon. The specifics of the bills include: HB 2202 - Limits check cashing fees to the greater of $5 or 2 percent for checks issued by the U.S. Government, the State of Oregon, or the municipality where the check is cashed; the greater of $ 5 or 3 percent for payroll checks and all other government checks; and the greater of $ 5 or 10 percent for personal checks. The total fee for cashing any check cannot exceed $100. Also establishes licensing requirements for check-cashing businesses. HB 2203 - Establishes a level playing field by applying Oregon's payday lending laws to all payday loans made to borrowers in Oregon, include those made by internet lenders or other lenders with no physical presence in Oregon. In addition, the bill allows the Department of Consumer and Business Services to implement and require payday and title loan licensees to participate in a statewide lender database to help ensure compliance with the rollover and seven-day wait limitations applicable to these loans. HB 2204 - Sets interest rate and fee caps on vehicle title loans to match the caps on payday loans, requires a minimum term of 31 days, and limits loans to two renewals. The bill also prohibits a title lender from making a new title loan to the same consumer within seven days of the expiration of the previous title loan. "Sale-leaseback" arrangements are included in the definition of title loans and are subject to these limits. HB 2871 - Caps interest rates for conventional consumer finance loans as well as payday and title loans to ensure that consumers are protected regardless of the loan type, and to keep high-cost lenders from finding and exploiting loopholes. Conventional loan rates are limited to an annual percentage rate of 36 percent or 30 percentage points above the discount rate on 90-day commercial paper, whichever is greater. The bill further restricts fees that can be charged by payday and title lenders; regulates brokers or facilitators of loans; and allows contract terms and other charges to be set by rule. Speaking before a group of legislative, community and religious leaders, the Governor emphasized the breadth of consumer protections undertaken during the 2007 session. "This will be remembered as a landmark session for consumer protection," the Governor said. "Together, these reforms reflect my commitment, and the commitment of my fellow Democrats', to ensuring that Oregon consumers are entitled to basic fairness in the marketplace and given an equal opportunity to succeed in society." Other consumer reforms this session include: * HB 2090 - Protects personal data filed with the Secretary of State from identity theft.

* HB 2107 - Requires construction contractors to notify the Construction Contractors Board (CCB) of unpaid judgments or arbitration awards that involve either breach of contract or negligent or improper work related to construction of a residential structure.

* HB 2213 - Requires insurers to offer advance costs estimates for key medical services.

* HB 2221- Establishes regulation of medical discount plans and cards.

* HB 2654 - Directs the CCB to establish standard contract terms for residential construction, addressing consumer rights and also requires residential contractors to offer a warranty and to provide maintenance information.

* HB 2708 - Prohibits construction agreements from requiring indemnification for damages caused by negligence.

* HB 2941- Expands Oregon law requiring car dealers to correct any problems discovered in a sold vehicle to include cars purchased in another state.

* SB 91 - Requires licensed contractors to notify the CCB of changes to the names or address of owners, officers, managers, members, trustees, or responsible managing individuals.

* SB 116 - Prohibits towing without required notice. Prohibits towers charging more than price disclosed. Prohibits requiring agreement not to dispute reason for tow, charges or condition of vehicle. Specifies hours of redemption for towed cars.

* SB 117 - Authorizes the state to bring enforcement actions for the federal Do Not Call Registry in state court.

* SB 118 - Authorizes the state to punish price gouging during times of emergency.

* SB 122 - Prohibits businesses sending consumers promotional checks that create a financial obligation once signed.

* SB 257 - Makes variable annuities subject to state insurance and securities regulation.

* SB 583 - Establishes strong safeguards for personal information against identity theft. Requires consumer notification of breaches in security of information. Gives consumers the ability to obtain a security freeze on their credit file in event of identity theft.

* SB 684 - Requires a permit from the Secretary of State to conduct a going-out-of-business sale. Limits sale length to 90 days. Limits sale to one per year.Contact: Anna Richter Taylor, 503/378-6169; Jake Weigler, 503/378-6496; Kristina Edmunson, 503/378-5040.

Anna Richter Taylor, 503/378-6169; Jake Weigler, 503/378-6496; Kristina Edmunson, 503/378-5040.