Interest Rate Limits

With all the talk of auto title loans, many people thought that there should be a blanket bill that would limit the amount of interest that could be charged on all consumer loans. It turns out someone was listening.

House Speaker Jeff Merkley, a Democrat from Portland, is sponsoring a bill that would do just that, capping annual interest rates for all consumer loans at 36%. Merkley says that with the new bills that change car title lenders from being able to charge 300-500% on their loans, that they should be looking at all consumer loans. The bill would take care of any loopholes that the first bill might have.

The consumer lending industry is not happy about the bill, needless to day, and is opposing it at a public hearing before the House Committee on Consumer Protection. They say that they are being unfairly penalized for those companies that are taking advantage of Oregon’s citizens.

Even with the industry fighting it, there are many groups who have stepped forward to support it. Groups such as the Oregon Synod of the Evangelical Lutheran Church in America, the AARP, the Center for Responsible Lending, etc. all have come forward in support of an interest cap of 36%. They say that there is no reason why these companies cannot support themselves without preying on those that can hardly afford to be taken advantage of.

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