DIVISION 730
CONSUMER FINANCE
441-730-0000
Statutory Authority; Purpose
(1) OAR 441-730-0000 to 441-730-0320 are adopted pursuant to the rulemaking authority granted the Director by ORS 725.320, and 725.505.
(2) The purpose of the rules is to provide revised consumer finance rules. The rules are considered necessary to assure the proper conduct of the business regulated, to enforce the Consumer Finance Act and to protect the public.
Stat. Auth.: ORS 725.320, 725.505
Stats. Implemented: ORS 725
Hist.: BB 14, f. & ef. 11-15-76; Renumbered from 805-075-0005;
FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 13-2001, f. &
cert. ef. 12-27-01; FCS 5-2006, f. & cert. ef. 12-21-06; FCS
2-2007(Temp), f. 6-29-07, cert. ef. 7-1-07 thru 12-27-07; FCS 9-2007,
f. 12-6-07, cert. ef. 12-27-07
441-730-0010
Definitions
(1) "Annual percentage rate” or “APR” means the annual percentage rate that every licensee is required by Regulation Z of the Federal Truth in Lending Act (Title I of the Consumer Credit Protection Act) to disclose to each of its credit customers.
(2) "Borrower" means a natural person.
(3) "Charges" means any one or more of the fees, premiums or other charges described by ORS 725.340(2)(a), (3) and (4), and other items charged to a borrower's account; but the term does not include interest or deferral charges.
(4) "Consumer finance licensee" means a person in the business of making loans for periods of more than 60 days that have periodic payments.
(5) "Deferral charges" means the additional charge assessed by a consumer finance licensee made for deferring all unpaid installments as provided by ORS 725.340(2)(b). Deferral charges do not apply to loans with a single payment payback feature.
(6) "Director" means the Director of the Department of Consumer and Business Services.
(7) "Extension" has the same meaning as "renewal" as defined in section (18) of this rule.
(8) “Finance charge” means the cost of consumer credit as a dollar amount. It includes any charge payable directly or indirectly by the consumer and imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit. It does not include any charge of a type payable in a comparable cash transaction.
(9) "Formalized grading system" means a formula or computer program that determines the creditworthiness of individual borrowers based on information regarding the borrower's financial condition, such as the borrower's income, assets, debts and financial obligations, and the nature and value of any collateral used to secure the loan.
(10) "Fully amortized" means characterized by periodic payments, that if made as scheduled, result in full repayment of the principal and interest owed on a loan by the end of the loan term.
(11) "License" means a consumer finance license or a short-term personal loan license issued under ORS 725.140.
(12) “Legally qualified in this state” means a business is qualified to conduct business in this state, having made the appropriate filings with the Secretary of State.
(13) "Licensee" means a person licensed as a consumer finance licensee or a short-term personal loan licensee.
(14) "Loan" means a loan that is subject to the Oregon Consumer Finance Act.
(15) "Loan underwriting" means a written or otherwise documented evaluation of the assumption of risk preceding the granting of a loan to a specific borrower, and may be fulfilled through use of a formalized grading system. Loan underwriting may be based on one or more of the following:
(a) Credit information furnished by the borrower, such as employment history, income, and outstanding obligations;
(b) A financial statement that includes income, assets and debts;
(c) Publicly available information concerning the borrower, that may include the borrower's credit report;
(d) The borrower's credit needs and willingness and ability to pay, including the nature and value of any collateral used to secure the loan.
(16) "Periodic payments" means loan repayments scheduled for monthly or more frequent periods of time.
(17) "Person" means a natural person or an organization, including a corporation, partnership, proprietorship, association, limited liability company or cooperative.
(18) "Renewal" of a loan means granting a borrower the right to postpone repayment of a short-term personal loan.
(19) "Roll-over" has the same meaning as "renewal" as defined in section (18) of this rule.
(20) "Same day transaction" means a short-term personal loan made on the same day that a previous short-term personal loan is paid-off and will be treated as a "renewal" defined in section (18) of this rule.
(21) "Short-term personal loan" means:
(a) A payday loan as defined in ORS 725.600;
(b) A title loan as defined in ORS 725.600; or
(c) Any other loan made by a person in the business of making short-term personal loans designated by rule or order of the director.
(22) "Short-term personal loan licensee" means a person issued a license under ORS 725.140 who engages in the business of making payday loans or title loans as defined in 725.600.
Stat.
Auth.: ORS 725.320 & 725.505
Stats.
Implemented: ORS 725.110, 725.140, 725.340, 725.360 & 725.600
Hist.:
BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renum?bered from
805-075-0007; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 2-2000, f. & cert.
ef. 2-15-00; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 6-2001(Temp), f. 6-29-01,
cert. ef. 7-1-01 thru 12-25-01; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 2-2004,
f. & cert. ef. 8-5-04; FCS 5-2006, f. & cert. ef. 12-21-06; FCS 2-2007(Temp),
f. 6-29-07, cert. ef. 7-1-07 thru 12-27-07; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0015
Licensee Lending Characteristics and Practices
(1) A consumer finance licensee, making loans under that license, shall make a determination of the creditworthiness of a borrower based on the information about the borrower’s financial condition, such as his or her income, assets, debts, and financial obligations, and the nature and value of any collateral used to secure the loan for the majority of loans made under a consumer finance license.
(2) A consumer finance licensee shall ensure that the majority of secured or unsecured loans made under a consumer finance license have:
(a) Periodic payments;
(b) Terms longer than 60 days;
(c) Loan underwriting; and
(d) Full amortization.
(3) A consumer finance licensee shall not:
(a) Disguise any loan as an open-ended loan authorized under ORS 725.345 or 725.347 as a device or subterfuge to evade the requirements and prohibitions of this rule;
(b) Retain the title to the vehicle used as security on a loan for more than thirty business days before submitting the application to be recorded as a lien-holder on the title or taking other commercially reasonable steps to be added as a security interest holder of the vehicle;
(c) Unreasonably withhold documents on a loan secured by a borrower’s vehicle for more than three business days if the loan is paid by certified or guaranteed funds; or
(d) Require a borrower, as a condition of making a loan under its consumer finance license, to provide a postdated check or debit authorization for one or more future payments. However, if permitted by the lender and at the discretion of the borrower, one or more postdated checks or debit authorizations may be delivered to a consumer finance licensee to facilitate timely future payments.
(4) A short-term personal loan licensee is limited to making payday loans or title loans or both under the short-term personal loan license, as stated on the license.
(5) A person is permitted to apply for, hold, and make appropriate loans under either a consumer finance license or a short-term personal loan license, or both licenses.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.110, 725.140(1) & 725.330
Hist.:
FCS 2-2000, f. & cert. ef. 2-15-00; Renumbered from 441-730-0005, FCS 5-2006,
f. & cert. ef. 12-21-06; FCS 3-2007(Temp), f. & cert. ef. 8-10-07 thru 12-27-07;
FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0025
License Applications
(1) For purposes of the investigation described in ORS 725.140(1), an applicant for a consumer finance or short-term personal loan license must submit the application form prescribed by the director, signed by an authorized owner or officer of the applicant.
(2)(a) An applicant, including a person that currently has a consumer finance or short-term personal loan license, must provide the employment history for the proposed manager of the licensed office for the five years immediately preceding the date of the application. A licensee employing a new manager may submit a resume to meet the requirements of this section.
(b) The employment history for a consumer finance license applicant’s proposed manager must demonstrate verifiable recent experience in traditional lending, including but not limited to, experience obtained in banking, consumer finance, or mortgage lending. For purposes of this rule, “recent” means no less than three years out of the five years immediately preceding the date of application. Short-term lending experience alone is not a sufficient substitute for the required experience.
(c) At the request of the applicant and in the sole discretion of the director, education, extensive training, or other business experience may be substituted for the three out of five years of traditional lending experience. Factors that the director may consider include relevance of the education, or the number, complexity and types of transactions handled in the substituted business experience. Short-term lending experience alone is not a sufficient substitute for the required experience.
(3) A person that is not currently licensed with the Director to make consumer finance or short-term personal loans must submit:
(a) The employment history for all executive officers, owners, directors, or managing partners. At least one-half of the executive officers, owners, directors, or managing partners must have verifiable recent lending experience in banking, consumer finance, or mortgage lending;
(b) A business plan, including but not limited to:
(A) Financial and operational history of the applicant, if any;
(B) Copies of any loan documents proposed to be used;
(C) A description of the types of loans and the percentage of the different types of loans the applicant proposes to make, the length of the loans the applicant proposes to make, the interest rates or range of rates the applicant proposes to charge and any other business activities the licensee will engage in at the location;
(D) The process by which the applicant will determine that loans to be made comply with requirements in OAR 441-730-0015(1); and
(E) Funding sources for the loans, including third-party financial institutions.
(4) For purposes of ORS 725.140 and this rule, the date of filing an application is the date the application is complete. An application shall be deemed complete on the date:
(a) All required fees have been paid; and
(b) All fully completed documents that are part of an application or required to be submitted by this rule have been received.
(5) An application for licensing is deemed abandoned if:
(a) The director has had one or more incomplete documents as part of an application for a minimum of 60 days; and
(b) The applicant has not responded within 30 days following a written notice from the director requesting submission of all fees, documents, or information necessary to make the application complete.
(6) An applicant whose application has been abandoned may reapply by submitting a new application including new fees.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.120 & 725.140
Hist.:
FCS 5-2006, f. & cert. ef. 12-21-06; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0030
Fees, Charges Licensees Pay the Director
(1) Effective February 1, 2009, the license fee under ORS 725.185:
(a) For conventional lender applicants or licensees, is:
(A) $600 for an initial application for each location to be licensed; and
(B) $600 for renewal for each licensed location, due and payable on January 1 of each calendar year;
(b) For short-term lender applicants or licensees, is:
(A) $750 for an initial application for each location to be licensed; and
(B) $750 for renewal for each licensed location, due and payable on January 1 of each calendar year.
(2) The rate of charge payable by a licensee is $75 an hour per person payable by the licensee for the Director and each examiner and other division employee used in an examination conducted under ORS 725.312 and for extra services provided a licensee under ORS 725.185(2).
(3) Notwithstanding the rate of charge fixed by section (2) of this rule:
(a) If an examiner from the division or the Director is required to travel out of state in conducting the examination or providing the extra services, the rate of charge payable by the licensee is $75 an hour per person, plus actual cost of travel; actual travel costs include air fare, lodging, food, car usage out of state, mileage to the Oregon airport and return, and travel time beginning from the departure time and ending at the departure time at the destination city;
(b) If the extra services or examination is performed by a consultant hired by contract for the particular service or examination, the charge payable by the licensee is the actual cost to the division of the contract consultant.
(4) As used in this rule, "extra services" means any attention other than an examination given under ORS 725.310.
(5) In addition to the charges fixed by sections (2) and (3) of this rule, the Director will collect from a licensee any additional costs directly attributable to extra services given the licensee under ORS 725.185 or a special examination given the licensee under ORS 725.310.
(6) The director may by order reduce the fees assessed for any specific year.
Stat.
Auth.: ORS 725.185
Stats.
Implemented: ORS 725.185
Hist.:
FID 8-1985, f. & ef. 12-31-85; FCS 2-1988, f. 1-29-88, cert. ef. 2-1-88; Renumbered
from 805-075-0015; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 1-1989, f. 1-18-89,
cert. ef. 2-1-89; FCS 1-2001, f. 1-22-01, cert. ef. 2-1-01; FCS 4-2003, f. 12-30-03
cert. ef. 1-1-04; FCS 4-2004, f. 11-1-04, cert. ef. 1-1-05; FCS 3-2005, f. &
cert. ef. 9-6-05; FCS 1-2008, f.& cert. ef. 1-28-08; FCS 2-2009, f. & cert.
ef. 2-3-09; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0050
Notes and Agreements Must Comply with ORS Chapter 725
(1) All forms of notes and agreements pertaining to loans and security for loans used by a licensee shall be so worded that they comply with all provisions of ORS Chapter 725 and these rules.
(2) Any forms or agreements required or authorized by federal statute or regulations and in compliance with those statutes or regulations are considered in compliance with and authorized by ORS Chapter 725.
Stat.
Auth.: ORS 725.505 & 725.625
Stats.
Implemented: ORS 725.120 & 725.320
Hist.:
BB 14, f. & ef. 11-15-76; BB 3-1978, f. 5-16-78, ef. 7-1-78; BB 5-1982, f. 9-1-82,
ef. 9-15-82; Renumbered from 805-075-0030; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88;
FCS 13-2001, f. & cert. ef. 12-27-01; FCS 5-2006, f. & cert. ef. 12-21-06;
FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0060
Loans Not to Be Payable on Demand; Exception
(1) Except as provided by section (2) of this rule, a loan shall not be made payable on demand.
(2) A loan may provide that, if there is a default under the note or collateral security agreement, the loan may become due and payable immediately or on demand.
Stat. Auth.: ORS 725
Stats. Implemented: ORS 725.050
Hist.: BB 14, f. & ef. 11-15-76; BB 3-1978, f. 5-16-78, ef.
7-1-78; Renumbered from 805-075-0040
441-730-0070
Advertising Regulations
(1) A licensee or other person shall not, in any advertisement printed, displayed, published, distributed, or broadcasted, including on the Internet, by the licensee or on the licensee's behalf include any reference to the supervision of the business of the licensee by this state or any department or official of this state, except the phrase "licensed under the Oregon Consumer Finance Act" or "subject to state regulation" or both.
(2) A licensee or other person shall not, in any advertisement printed, displayed, published, distributed, broadcast, including on the Internet, by the licensee or on the licensee's behalf, use any name other than the name under which the license is issued.
(3) A licensee shall retain a copy of all advertising for the period beginning with the date of the last examination in a designated licensed office, or with the prior approval of the Director, at another location until an examiner has reviewed the material.
(4) Notwithstanding the provisions of sections (1) and (2) of this rule:
(a) A licensee that makes and closes the majority of loans in a licensed location shall prominently post their license in a manner conspicuous to the public; or
(b) If a licensee makes and closes the majority of loans electronically, they must prominently post their license on their website and at their licensed location in a manner conspicuous to the public.
(5) The posted license shall state that the business is licensed and regulated by the Department of Consumer and Business Services, and will include the Department’s toll-free telephone number for public inquiries or complaints.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.060
Hist.:
BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renum?bered from
805-075-0045; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 2-2001, f. 1-22-01,
cert. ef. 3-22-01; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 3-2009, f. &
cert. ef. 6-2-09
441-730-0080
Qualifications of Person in Charge of Licensed Office
(1) A loan licensee shall not place any person in charge of a licensed office unless the person has a thorough understanding of ORS chapter 725 and these rules.
(2) A consumer finance licensee must place the experienced person as described in OAR 441-730-0025(2) in its licensed office.
(3) Notwithstanding section (2) of this rule, if the consumer finance licensee holds a license for more than one location or if the experienced person described in OAR 441-730-0025(2) is employed outside of Oregon, the licensee may place a qualified person with no less than one year's traditional lending experience in charge of each licensed office provided the experienced person described in OAR 441-730-0025(2) supervises the lending operations of each location.
(4) At the request of the applicant and in the sole discretion of the director, education, extensive training or other business experience may be substituted for the one year of relevant lending experience required in section (3) of this rule.
(5) Unless a consumer finance licensee requires all loan underwriting decisions be forwarded to an experienced person at another location or uses a formalized grading system, a licensee must employ or place a qualified person as described in this rule at each licensed office to be in charge of and oversee the lending operations of the office. A licensee must provide the director with a current resume for any new manager employed or placed at a licensed office within 30 days of the date of their employment.
Stat.
Auth.: ORS 725.505 & 725.625
Stats.
Implemented: ORS 725.140, 725.310 & 725.330
Hist.:
BB 14, f. & ef. 11-15-76; Renumbered from 805-075-0050; FCS 13-2001, f. &
cert. ef. 12-27-01; FCS 2-2004, f. & cert. ef. 8-5-04; FCS 5-2006, f. &
cert. ef. 12-21-06; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0100
Licensee Officers and Directors
(1)(a) A consumer finance lender may add a new executive officer, owner, director, or managing partner at any time after the lender has been granted a license if after the addition at least one-half of the executive officers, owners, directors, or managing partners can demonstrate verifiable recent lending experience in banking, consumer finance, or mortgage lending as required by OAR 441-730-0025.
(b) If a consumer finance licensee adds a new executive officer, director, partial owner, or managing partner under this section, the licensee must provide a current resume for such new persons demonstrating verifiable recent lending experience in banking, consumer finance, or mortgage lending to the Director within 30 days of their appointment or selection.
(2) If an existing or new executive officer, director, partial owner, or managing partner of the consumer finance licensee gains a controlling interest in the company after the license has been granted, the licensee must notify the Director within 30 days.
(3) An officer or director of a licensee addressed in an order issued by the licensing authority under ORS 725.315 or 725.317 may, within 30 days after the date the order is issued and served, request a hearing on the order as provided for contested cases by 183.310 to 183.500, and the rules of the Director adopted pursuant thereto.
(4) A person who is suspended or removed under ORS 725.315 or 725.317 shall not conduct any of the business of the licensee or have access to the books, records, or assets of the licensee either as an officer, director, partner, stockholder, or employee without receiving permission from the Director:
(a) During the period of the suspension; or
(b) After the effective date of the removal.
(5) A licensee subject to an order of suspension under the provisions of ORS 725.230(2) may, within 90 days after the date the order is issued or served, request a hearing on the order as provided for contested cases by 183.310 to 183.500 and the rules of the Director adopted pursuant thereto.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.315 & 725.317
Hist.:
BB 3-1978, f. 5-16-78, ef. 7-1-78; Renumbered from 805-075-0057; FCS 12-1988, f.
7-20-88, cert. ef. 8-1-88; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 2-2004,
f. & cert. ef. 8-5-04; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0110
Accounting Records of Licensee
(1) The accounting records of a licensee shall reflect a complete segregation of the loan transactions from any other business in which the licensee may be engaged.
(2) The licensee shall maintain separate control accounts or other acceptable records to reflect such segregation for:
(a) Loans receivable;
(b) Charges; and
(c) Repossessed property and sales of repossessed property.
(3) The receipt and disbursement of all charges charged or collected shall be fully accounted for.
(4) Each licensee shall maintain a log of:
(a) Loans made, listing each loan in sequence by number or date of loan and showing:
(A) The amount of the loan;
(B) The type of security taken;
(C)The rate of interest charged; and
(D) The types of insurance for which premium charges have been made in connection with the loan and which are payable by the borrower.
(b) Loans prepaid in full by credit life insurance showing for each loan so paid;
(A) The borrower's name and account number;
(B) The date of death of the borrower;
(C) The date proof of death was received by the licensee; and
(D) The disposition of the insurance proceeds with substantiating documents.
(c) Any litigation initiated by the licensee showing for each proceeding:
(A) The borrower's name and account number;
(B) The court where the proceeding is filed;
(C) The date of filing; and
(D) When applicable, the date, and terms of any disposition of the matter.
(d) Information on files sent to a collection agency showing, for each file:
(A) The borrower's name, the account number;
(B) The original date of the loan, the due date of the loan, or last renewal or extension;
(C) The date the loan was sent to the collection agency;
(D) The name of the collection agency; and
(E) The date and amount of monies received from the collection agency.
(F) A separate log of files sent to a collection agency need not be maintained provided the information is available in existing records at the time of examination.
(5) Any public or private sale of repossessed property by a consumer finance licensee shall be made in good faith and in a commercially reasonable manner. If there is no recognized market for the property, such as a motor vehicle auction house or similar sales process that is commonly used to sell property of the kind repossessed by the licensee, prior to a private sale of repossessed property, the licensee shall obtain, from persons who are not directly or indirectly related to the licensee, sufficient written bids to establish market value. The written bid must contain sufficient information to identify the property being bid on.
(6) When a judgment is entered in a court proceeding initiated by a licensee on a loan, the licensee forthwith shall place in the related loan file either:
(a) A copy of the judgment entered in the proceeding; or
(b) A statement verified by a representative of the licensee, detailing the essential provisions of the judgment.
(7) Short-term personal loan licensees who make both title and payday loans must maintain separate logs for each type of loan.
Stat.
Auth.: ORS 725.320 & 725.505
Stats.
Implemented: ORS 725.330
Hist.:
BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from
805-075-0060; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 2-2000, f. & cert.
ef. 2-15-00; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 13-2001, f. & cert.
ef. 12-27-01; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0120
Account Record to Be Maintained for Each Loan
(1) The licensee shall maintain a separate individual account record for each loan made to any borrower. The record shall show:
(a) The loan number;
(b) The date of the loan;
(c) The name and address of the borrower;
(d) A brief description of the security, if any;
(e) The agreed interest rate or rates and the amount of each charge, if any;
(f) The terms of repayment, including the expiration date of the loan, and any modifications of the terms.
(g) The amount of each payment made on the loan and in accordance with sections (2) and (3) of this rule, how the payment is allotted to principal, interest and charges;
(h) The date of the final entry when the loan is paid in full or otherwise finally settled or closed; and
(i) A clear, brief explanation of any other entries that result in the reduction or addition to the principal balance or interest.
(2) The account record for a daily interest loan shall show, for each loan payment received:
(a) The amount, if any, applied to interest;
(b) The date to which the interest is paid;
(c) If payment is insufficient to pay interest to date, the dollar amount short;
(d) The amount applied to principal, if any; and
(e) The unpaid principal balance of the loan, if any.
(3) The account record for a precomputed-interest loan may comply with section (2) of this rule or it shall show, for each loan payment received:
(a) The amount of the payment applied to installments, identifying which installments;
(b) The amount applied to any default charges; and
(c) The unpaid balance of the loan and charges, if any.
(4) When a licensee makes advances to perform covenants, the account record shall specify:
(a) The amount of the advance which is added to the principal of the loan.
(b) A brief description of what the advance is paying; and
(c) When the advance is to purchase insurance coverage, the type and extent of coverage.
(5) The account record for a short-term personal loan shall show the date each loan is renewed, the amount of the charge the borrower paid and the new due date of the loan.
(6) All entries to the account record made by the licensee must be accurate and entered on the day the transaction occurred. However, a licensee may establish a reasonable time of day after which payments received that day will be posted on the following business day. If the licensee is unable to post a transaction as required by this section, the posting when made must reflect the actual date of the transaction.
Stat.
Auth.: ORS 725.320 & 725.505
Stats.
Implemented: ORS 725.330
Hist.:
BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renum?bered from
805-075-0065; FCS 2-2000, f. & cert. ef. 2-15-00; FCS 2-2001, f. 1-22-01, cert.
ef. 3-22-01; FCS 13-2001, f. & cert. ef. 12-27-01; FCS 5-2006, f. & cert.
ef. 12-21-06; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0130
Index of Obligors to Be Maintained
A licensee shall maintain in each of its licensed offices an alphabetical index, or other index system approved by the Director, of every person obligated, directly or contingently, on a loan that is serviced at that office.
Stat. Auth.: ORS 725
Stats. Implemented: ORS 725.330
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef.
9-15-82; Renumbered from 805-075-0070; FCS 13-2001, f. & cert.
ef. 12-27-01
441-730-0140
Records and Files Required to Be Kept at Servicing Office; Copies of Loans Transferred; Centralized Accounting Office Exception
(1) A licensee shall maintain the accounting records and loan files for active loans at the licensed office where the loans are serviced.
(2) Whenever an active loan is for any reason transferred to another licensed office in this state, the licensee shall retain in the transferring office an exact copy of the individual account record and supporting legal documents.
(3) Whenever an active loan is for any reason transferred to another licensed office, the licensee shall retain in the transferring office an exact copy of the account record to which has been added the date of transfer and the name and address of the new location of the account. However, if a bulk sale or similar transfer of loans not in the ordinary course of business is made to another licensed office, the licensee may, with the prior approval of the Director, make other provisions for the retention of copies of records and files and for the examination of accounts in the receiving office.
(4) Whenever an active loan is sent to a collection agency, the licensee shall retain in the originating office the original record or an exact copy of the account record.
(5) Notwithstanding sections (1) through (4) of this rule, a licensee may, with the prior approval of the Director, maintain the accounting records and loan files for active loans at a location other than the servicing office if:
(a) The other location is established by the licensee to provide centralized accounting for one or more licensed offices;
(b) Off-site maintenance of the records and files will not hinder prompt servicing of the loans by the servicing offices;
(c) The Director, and any duly appointed examiners or agents of the Director, have the right of free access to the records and files of the licensee at the other location; and
(d) The other location provides adequate security for the licensee's records and files.
Stat. Auth.: ORS 725.320 & 725.505
Stats. Implemented: ORS 725.330
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef.
9-15-82; BB 1-1983, f. 3-29-83, ef. 4-1-83; Renumbered from
805-075-0075; FCS 2-2000, f. & cert. ef. 2-15-00; FCS 2-2001, f.
1-22-01, cert. ef. 3-22-01
441-730-0150
Consolidating Sales Financing into Direct Loans
(1) A licensee shall not make a direct loan to pay off a retail installment contract owned by or assigned to the licensee if the loan bears a higher APR than that borne by the contract unless the loan is of substantial benefit to the borrower. A substantial benefit would exist in circumstances including, but not limited to one or more of the following:
(a) The retail installment contract is in default two installments or more;
(b) The amount of the individual installments payable on the direct loan will be lower than the amount of the individual installment being paid on the contract;
(c) The direct loan pays off one or more obligations in addition to the retail installment contract;
(d) The principal amount of the direct loan exceeds the sum of the unpaid installments on the retail installment contract by not less than 20 percent of the sum of the unpaid installments, or by $200, whichever is less.
(2) As used in this rule, "retail installment contract" has the meaning given the term by ORS 83.010 and 83.510.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.320
Hist.:
BB 3-1978, f. 5-16-78, ef. 7-1-78; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered
from 805-075-0103; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 13-2001, f. &
cert. ef. 12-27-01; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0160
Daily-Interest Computation
(1) When interest on a loan is computed on a daily basis using a 360-day factor, the maximum charge for each day shall be 1/30 of the monthly rate. In determining the elapsed time for the purpose of computing interest on any such loan, each calendar month shall be treated as containing 30 days. However, when the period for which interest is computed includes the last day of the month:
(a) If the month has 31 days, the 31st day shall be ignored:
(b) If the month is February, two days shall be added to the period, except in leap year when only one day shall be added.
(2) Interest on a loan may be computed on a daily basis using a 365-day factor or, in a leap year, a 366-day factor. In determining the elapsed time for the purpose of computing interest or a refund of interest, on such a loan, the maximum charge for each day shall be 1/365th of the annual rate, except in a leap year when the maximum charge for each day shall be 1/366th of the annual rate.
(3) Short Term Personal Loan lenders must compute daily interest using subsection (2) of this rule.
Stat. Auth. ORS 725.320 & 725.505
Stats. Implemented ORS 725.340
Hist.: BB 14, f. & ef. 11-15-76; Renumbered from 805-075-0105;
FCS 2-2000, f. & cert. ef. 2-15-00; FCS 2-2001, f. 1-22-01, cert.
ef. 3-22-01; FCS 2-2004, f. & cert. ef. 8-5-04
441-730-0165
Unfair or Deceptive Practices
A short-term personal loan licensee shall not disguise the terms or provisions of any loan as a device or subterfuge to evade the requirements and fees and interest authorized under ORS Chapter 725. Such conduct shall be deemed a violation of 725.340, 725.600, and 725.615, and dishonest, fraudulent, or illegal practices under 725.145.
Stat.
Auth. ORS 725.320 & 725.505
Stats.
Implemented ORS 725.145 & 725.340
Hist.:
FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0170
Precomputed Interest
(1) When a loan contract is repayable in substantially equal and consecutive monthly installments of principal and interest combined, interest may be precomputed and added to the principal. Interest may be precomputed even though the first installment period is more or less than one month.
(2) If the first installment period exceeds one month, the amount of the agreed monthly interest charge shall be reduced for the first period by 1/30th of the amount for each extra day in the first period. If the first installment period is less than one month the amount of the agreed monthly interest charge shall be reduced for the first period by 1/30th of the amount for each day that the first installment period is less than one month.
(3) Short-term personal loans which have a single payment payback feature are not precomputed interest loans.
Stat.
Auth.: ORS 725.320 & 725.505
Stats.
Implemented: ORS 725.340
Hist.:
BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from
805-075-0110; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88; FCS 2-2000, f. & cert.
ef. 2-15-00; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0180
Deferred Payment on Precomputed Loan
(1) When unpaid installments are deferred as provided by ORS 725.340(2)(b), the licensee shall give the borrower written evidence of the agreed deferral showing:
(a) The amount of the deferral charge;
(b) The new due date of the first deferred installment; and
(c) The new due date of the final deferred installment of the loan.
(2) The licensee shall also note the due date of the final deferred installment and the amount of the deferral charge on the borrower's account record.
(3) The provisions of this rule do not apply to short-term personal loans.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.340(2)
Hist.:
BB 14, f. & ef. 11-15-76; BB 3-1978, f. 5-16-78, ef. 7-1-78; BB 5-1982, f. 9-1-82,
ef. 9-15-82; Renumbered from 805-075-0120; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01;
FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0200
Action on Precomputed Loan; Rebate Required
(1) When a lender brings an action against a borrower on a precomputed loan, if the action comes to judgment prior to the due date of the final installment, the lender shall tender a rebate to the borrower of interest unearned as of the date of the judgment. The rebate shall be computed in accordance with ORS 725.340(2)(c) as if the loan were prepaid in full on the date of the judgment.
(2) Rebate of any deferral charge shall be determined on the US Actuarial Rule.
(3) Lenders may collect prejudgment interest awarded by the court, but may not estimate interest based upon an estimate of the judgment date.
Stat.
Auth.: ORS 725.320 & 725.505
Stats.
Implemented: ORS 725.340
Hist.: BB 14,
f. & ef. 11-15-76; BB 3-1978, f. 5-16-78, ef. 7-1-78; BB 5-1982, f. 9-1-82,
ef. 9-15-82; Renumbered from 805-075-0130; FCS 12-1988, f. 7-20-88, cert. ef. 8-1-88;
FCS 2-2000, f. & cert. ef. 2-15-00; FCS 13-2001, f. & cert. ef. 12-27-01;
FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0205
Limitation on Charging a Prepayment Penalty by Consumer Finance Licensees
A consumer finance licensee may not charge a penalty for prepayment of all or part of the unpaid balance of a loan where:
(1) A licensee refinances a loan they own.
(2) The licensee has repossessed any collateral offered for the loan, sold the collateral and applied the proceeds of the sale towards the unpaid balance of the loan.
(3) The licensee forecloses on property and applies any proceeds realized as a result of the foreclosure toward the unpaid balance of the loan.
(4) The licensee exercises an option contained in the loan agreement to require immediate repayment of all or part of the unpaid balance of the loan.
(5) All or part of the loan balance is repaid with insurance benefits resulting from the death of the borrower.
(6) The licensee demands repayment of all or part of the unpaid balance of the loan.
(7) The loan is a home equity line of credit or an unsecured line of credit.
Stat.
Auth.: ORS 725.320 & 725.505
Stats.
Implemented: ORS 725.360
Hist.:
FCS 2-2000, f. & cert. ef. 2-15-00; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01;
FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0210
Recomputation of Interest on Delinquent Precomputed Loan
If two or more installments of a precomputed loan are delinquent, the licensee may elect to recompute interest and other charges. A recomputation shall be made at the agreed interest rate, or at the APR, from the date the loan was made, on actual unpaid balances, until the date the loan is paid in full. When such an election is made, the licensee shall recompute the interest charges from the date of the loan to the date of the election by applying every payment received prior to the election first to interest and then to the unpaid principal as of the date the payment was received. Recomputed interest so received is in lieu of the precomputed interest, including any deferral charges, and default charges which accrued prior to the date of the election.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.340
Hist.:
BB 14, f. & ef. 11-15-76; BB 3-1978, f. 5-16-78, ef. 7-1-78; BB 5-1982, f. 9-1-82,
ef. 9-15-82; Renumbered from 805-075-0135; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0220
Insurance Premium Charges; Refunds
If a loan contract is prepaid in full by cash, renewal, refinancing, or a new loan, one month or more before the final installment due date, the licensee shall refund to the borrower that proportion of the credit life and credit health insurance premium collected which the sum of the monthly balances scheduled to follow the installment date nearest the date of prepayment in full bears to the sum of all scheduled monthly balances, as computed in accordance with the rule commonly know as the "rule of seventy-eights." However, a licensee is not required to make a refund if the unearned insurance premium is less than $2 and the loan is prepaid in full by cash.
Stat. Auth.: ORS 725
Stats. Implemented: ORS 725.340
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef.
9-15-82; Renumbered from 805-075-0145
441-730-0230
Insurance Benefits Paid to Licensee
(1) When a death claim settlement is made on a borrower's account and the credit life insurance premium charged was based on the total of installments contracted, including both principal and anticipated interest, the licensee shall credit the borrower's account or estate in an amount not less than the total of all installments including both principal and unearned interest which were insured and scheduled to follow the date of the borrower's death. The licensee is entitled to accrue interest for not to exceed 30 days after proof of death is received by the licensee or until the date the insurance check is received, whichever is first to occur. A copy of the insurance check shall be retained in the file for auditing purposes.
(2) If premium charges for other types of credit life and credit health insurance have been charged to the account of the deceased borrower, the unearned charges shall also be credited to the borrower's account or estate from date of death.
Stat. Auth.: ORS 725
Stats. Implemented: ORS 725.340
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef.
9-15-82; Renumbered from 805-075-0150
441-730-0240
Statement of Loan
(1) In addition to the statement required by ORS 725.360(1), the licensee shall, at the time each loan is made, deliver to the borrower:
(a) A written statement that payment in any amount may be made in advance at any time and, if the loan contains a prepayment penalty, the statement shall comply with the notice required by ORS 82.160(1).
(b) A detailed schedule showing the manner in which the proceeds of the loan have been disbursed or are to be disbursed on behalf of the borrower, including:
(A) Amounts applied to payment of the balance of an existing loan with the licensee;
(B) Amounts paid to others as authorized and designated by the borrower;
(C) Amounts paid for insurance premiums, itemizing the types of insurance that the borrower has approved in writing and, if the coverage of any policy is less than the principal balance or the full term of the loan, state the balance and term covered.
(D) Amounts paid for other identifiable charges the borrower has approved in writing;
(E) Amounts retained for filing, releasing, recording, satisfaction, reconveyance, license, title transfer, and similar fees, itemizing the purpose of each fee; and
(F) Amounts remaining that will be paid to the borrower.
(c) When requested by the borrower, a copy of the security agreement, trust deed, or mortgage signed by the borrower, together with any attached schedule of property pledged by the borrower.
(2) When copies are requested by any other person obligated directly or contingently on the loan, the licensee shall also deliver a copy of the statements and other documents required by ORS 725.360(1) and section (1) of this rule to such other person whether the person is obligated as a maker, co-maker guarantor, accommodation maker, endorser or otherwise.
(3) The statement required by section (1) of this rule may include disclosures under applicable federal law that a licensee is required to make to the borrower at the time the loan is made.
(4) The licensee shall retain a copy of the statement of loan delivered to the borrower for at least two years after final entry has been made on the loan records.
Stat. Auth.: ORS 725
Stats. Implemented: ORS 725.330, ORS 725.340 & ORS 725.360
Hist.: BB 14, f. & ef. 11-15-76; BB 3-1978, f. 5-16-78, ef.
7-1-78; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from
805-075-0170; FCS 6-2001(Temp), f. 6-29-01, cert. ef. 7-1-01 thru
12-25-01; FCS 13-2001, f. & cert. ef. 12-27-01
441-730-0245
Contents of Foreclosure Notices
The sender of a notice form required by 2008 Or Laws, ch. 19, ¦ 20 must enter in the form and format adopted by this rule:
(1) The statewide telephone contact number for handling consumer queries as 800-SAFENET (800-723-3638).
(2) The telephone number of the Oregon State Bar’s Lawyer Referral Service as 503-684-3763;
(3) The Oregon State Bar’s Lawyer Referral Service toll-free number as 800-452-7636;
(4) The website address of the Oregon State Bar as http://www.osbar.org;
(5) The website address for the organization providing more information and a directory of legal aid programs as http://www.oregonlawhelp.org
Stat. Auth.:
2008 OL, ch. 19, ¦ 20
Stat. Implemented:
2008 OL, ch. 19, ¦ 20
Hist.: FCS
2-2008(Temp), f. & cert. ef. 4-18-08 thru 10-15-08
441-730-0246
Contents of Foreclosure Notices
The sender of a notice form required by 2008 Or Laws, ch. 19, § 20 and as amended by 2009 Or Laws ch. 864, § 1 (Enrolled Senate Bill 628) must enter in the form and format adopted by this rule:
(1) The statewide telephone contact number for handling consumer queries as 800-SAFENET (800-723-3638)
(2) The telephone number of the Oregon State Bar’s Lawyer Referral Service as 503-684-3763;
(3) The Oregon State Bar’s Lawyer Referral Service toll-free number as 800-452-7636;
(4) The website address of the Oregon State Bar as http://www.osbar.org;
(5) The website address for the organization providing more information and a directory of legal aid programs as http://www.oregonlawhelp.org
(6) The toll-free consumer mortgage foreclosure information number as 800-SAFENET (800-723-3638); and
(7) Information on federal loan modification programs as http://www.makinghomeaffordable.gov/.
Stat.
Auth.: 2008 OL Ch. 19 § 20
Stat.
Implemented: 2008 OL Ch. 19 § 20, 2009 OL ch. 864, § 1 (Enrolled SB 628)
Hist.:
FCS 9-2008, f. 10-15-08, cert. ef. 10-16-08; FCS 6-2009(Temp), f. 8-21-09 thru 2-17-10;
FCS 11-2009, f. 12-2-09, cert. ef. 12-7-09
441-730-0250
Receipt to Be Furnished to Borrower Upon Request
(1) When the borrower requests a receipt for a payment on a loan for which interest is to be computed on a daily basis, the receipt shall specify:
(a) The amount applied to interest, if any;
(b) The date to which the interest is paid, or the dollar amount short, if payment is insufficient to pay interest to date;
(c) The amount applied to principal, if any; and
(d) The unpaid principal of such loan, if any.
(2) When a borrower requests a receipt for a payment on a loan that is contracted for interest to be precomputed, the receipt shall specify:
(a) The amount of the payment applied to the loan and any default charges; and
(b) The amount of the unpaid balance of the loan and charges, if any.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.360
Hist.:
BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef. 9-15-82; Renumbered from
805-075-0175; FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 13-2001, f. & cert.
ef. 12-27-01; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0255
Payoff Information to be Furnished to Borrower Upon Request
(1) When a borrower requests the payoff information on a loan and specifies a payoff date, the lender shall promptly, but in no case later than three business days, provide the requested information.
(2) When a borrower does not specify a payoff date, the lender must calculate the payoff amount for a date no later than 10 days after the date of the request, and the amount must be provided within three business days of the borrower’s request. When a lender provides a payoff amount, it must also advise the borrower, verbally or in writing, that interest will continue to accrue past the payoff date if the loan is not paid in full.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.360
Hist.:
FCS 5-2006, f. & cert. ef. 12-21-06; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0260
Advances to Perform Covenants
(1) Within a reasonable time after advancing any sum pursuant to ORS 725.340(3), the licensee shall furnish the borrower a written statement showing:
(a) The amount of the sums advanced and, any charges with respect to such sums advanced;
(b) Any revised payment schedule; and, if the duties of the borrower performed by the lender pertain to insurance.
(c) A brief description of the types of insurance paid for the by licensee.
(2) The amount advanced by the licensee may be added to the unpaid balance of the loan and may bear interest not to exceed the rate permitted by ORS 725.340(3). However, a licensee shall not advance any sums under ORS 725.340(3) or add any such advances to the unpaid balance of a loan unless the borrower's loan contract provides for such advances and additions.
Stat. Auth.: ORS 725
Stats. Implemented: ORS 725.340(3)
Hist.: BB 14, f. & ef. 11-15-76; BB 5-1982, f. 9-1-82, ef.
9-15-82; Renumbered from 805-075-0180; FCS 13-2001, f. & cert.
ef. 12-27-01
441-730-0271
Conditions Applicable to Short-Term Personal Loans
(1) Interest shall not be compounded.
(2) The loan agreement shall have the following information displayed prominently in bold print on the first page of the agreement:
(a) The APR;
(b) The amount of the loan;
(c) The amount of interest or finance charge if paid when the loan is due;
(d) The total amount due on the due date; and
(e) The due date. Compliance with the disclosure requirements of Truth In Lending, 15 U.S.C. 1601 et seq., and Regulation Z, 12 C.F.R. Part 226, will satisfy the requirements of this section.
(3) If a borrower is permitted to renew a loan after the due date, the renewal shall be effective on the due date of the loan.
(4) If the lender does not deliver the note to the borrower marked "Paid or Renewed," in compliance with ORS 725.360(4)(d), they must state that the borrower's canceled check will evidence payment of the loan in the loan agreement. In such cases, the lender must retain the note marked "Paid" or "Renewed" in the file. An electronic transmission may fulfill the requirements of this section if the loan is made using an electronic medium and the consumer has consented to use of electronic transmission.
(5) If the lender does not cash the borrower's check, the note must be returned marked "Paid" and the requirements of subsection (4) of this rule would not apply. The lender must also mark the check "Void" and return it to the borrower with the note marked "Paid".
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.360, 725.505, 725.605, 725.615 & 725.622
Hist.:
FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0272
Conditions Applicable to Short-Term Personal Loan Lenders
(1) A short-term personal loan 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 shall provide the applicant with a written notice of the reason for declining a loan. The notice may be provided to the applicant at the time the loan is declined or the notice may be mailed to the applicant. A copy of the notice must be retained in the borrower’s files. There are specific Equal Credit Opportunity Act exceptions to providing such notice.
(c) Must prominently post the APR inside their office where customers can easily see it and the APR must be prominently posted on the lender’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 short-term personal loan lender shall:
(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 short-term personal loan licensee does not give a borrower the note marked “Paid or Renewed” in compliance with ORS 725.360(4)(d), the loan agreement must state that the borrower's canceled check will be evidence of payment of the loan. The lender must mark the note "Paid" or "Renewed" and retain the note in the file. An electronic transmission may fulfill the requirements of this section if the loan is made using an electronic medium and the consumer has consented to use of electronic transmission.
(4) A short-term personal loan 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% 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% 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) At the time application is made, a short-term personal loan 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 725.615 and 725.622, a short-term personal loan 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% 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 $9.17 interest and renews the loan with a new due date of October 4. If the borrower is unable to repay the loan on October 4, no further renewals are allowed, and the lender may not make a new loan to the borrower until October 11.
(7) If the Short-term personal loan 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 725.605.
(8) For purposes of the investigation described in ORS 725.140(1), an applicant for a short-term personal loan license must authorize an investigative consumer report as defined in the Fair Credit Reporting Act, 15 USC 1681 et. seq.
(9) No short-term personal loan license shall 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.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.360, 725.505, 725.605, 725.615 & 725.622
Hist.:
FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0275
Conditions Applicable to Title Loans Made by Short-Term Personal Loan Licensees
(1) Title loan contracts may not provide for the continuation of interest or other charges after repossession.
(2) For loans in default, lenders must send a written notice by first class mail, in a form approved by the Director, to the borrower’s last known address 10 days prior to repossession.
(a) The notice must be dated the day it is mailed;
(b) A dated copy of the notice must be placed in the borrower file; and
(c) Repossession may not occur until the 11th day from the date of the notice.
(3) Unless an auctioneer conducts the sale at a public or dealer auction, the lender must obtain at least three bids on the vehicle prior to the sale of a vehicle. The bids must be in writing and contain the identity of the vehicle, the amount of the bid, and the name and address of the bidder.
(4) Lenders may not sell a vehicle to an agent, affiliate, subsidiary, or employee of the licensee.
(5) If a vehicle is sold, the borrower must receive all proceeds, exceeding the debt and reasonable costs associated with the repossession and sale. The lender must deliver the proceeds no later than three business days after they receive the proceeds of the sale. If the vehicle was paid for by a check, the lender may deliver the proceeds within three days after the check has cleared.
(6) The borrower may not be charged any storage charge, regardless of how long the vehicle is held prior to sale, if the vehicle is stored on property owned, leased, or otherwise controlled by the lender.
(7) If more than one person holds title to a vehicle, the vehicle may not be repossessed unless all such persons have signed the necessary loan documents.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.360, 725.505, 725.605 & 725.615
Hist.:
FCS 13-2001, f. & cert. ef. 12-27-01; FCS 2-2004, f. & cert. ef. 8-5-04;
FCS 2-2007(Temp), f. 6-29-07, cert. ef. 7-1-07 thru 12-27-07; FCS 3-2009, f. &
cert. ef. 6-2-09
441-730-0280
Prohibited Provisions in Loan Contract Provisions
A consumer finance or short-term personal loan licensee may not use a contract evidencing a loan that contains any of the following provisions:
(1) A hold harmless clause;
(2) A confession of judgment or other waiver of the right to notice and the opportunity to be heard in the event of suit or process;
(3) A provision in which the consumer agrees not to assert any claim or defense arising out of the contract against the licensee or any holder in due course.
(4) An executory waiver or a limitation of exemption from attachment, execution, or other process on real or personal property held, owned by, or due to the consumer, unless the waiver applies solely to property subject to a security interest executed in connection with the loan.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.360
Hist.:
FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 4-2001, f. & cert. ef. 3-27-01;
FCS 6-2001(Temp), f. 6-29-01, cert. ef. 7-1-01 thru 12-25-01; FCS 13-2001, f. &
cert. ef. 12-27-01; FCS 3-2009, f. & cert. ef. 6-2-09
441-730-0310
Refund of Unearned Interest and Charges and Prohibition on Prepayment Penalty
(1) If a borrower pays off a short-term personal loan licensee prior to the due date, the licensee must refund all unearned interest and charges.
(2) For purposes of this rule, the short-term personal loan licensee shall calculate earned interest and charges by multiplying the loan amount by the interest rate and dividing by 365 to find daily interest then multiply that quotient by the number of days from the date the loan was made to the date of pay-off counting the day after the loan was made as the first day.
Example: A borrower gets a loan of $200 on the 5th day of the month at 36% interest and comes on the 25th of the month to pay off the loan. The interest is calculated as follows: $200 x 0.36 = $72 divided by 365 = $0.20 per day x 20 days = $4.00 interest. If the borrower gave you a check on the 5th for the full 31 day term ($206.12), the unearned interest of $2.12 must be refunded. There is no minimum interest amount.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.340 & 725.360
Hist.:
FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 13-2001, f. & cert. ef. 12-27-01;
FCS 2-2007(Temp), f. 6-29-07, cert. ef. 7-1-07 thru 12-27-07; FCS 3-2009, f. &
cert. ef. 6-2-09
441-730-0320
Licensee Reporting
Licensees are required to file their annual reports by June 30 of each year for calendar year 2009. Beginning in calendar year 2010 and thereafter, licensees are required to file their annual report by March 31 of each year. Licensees must also provide known information on any felony conviction, or any conviction involving theft or fraud, of any executive officer, director, managing partner, or the manager of any office location that occurred during the period covered by the report. The report shall cover operations for the period of the previous calendar year. For purposes of this rule, "operations for the period of the previous calendar year" includes any of the following that has not previously been brought to the attention of the director in writing:
(1) A new qualified person or office manager;
(2) A new experienced person;
(3) Material changes in business plan; or
(4) Any criminal conviction entered against any person named in the application.
Stat.
Auth.: ORS 725.505
Stats.
Implemented: ORS 725.190
Hist.:
FCS 2-2001, f. 1-22-01, cert. ef. 3-22-01; FCS 5-2006, f. & cert. ef. 12-21-06;
FCS 3-2009, f. & cert. ef. 6-2-09
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