ORS Chapter 725

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