Department of Consumer and Business Services
Division of Finance and Corporate Securities
Previous Years' Legislative Summaries
These summaries are not intended to be a complete and detailed statement of all applicable legislation.
For a complete list of legislation, please visit the Oregon
Legislature's Web site.
Unless otherwise specified, the effective date of a bill is January 1 of the year following
its enactment. A bill may also have one or more operative dates that apply to one or more sections
of the bill, in addition to its effective date. An operative date is the date on which the affected
section or sections first apply.
Bills are identified by their bill numbers. SB indicates a Senate bill, HB indicates a House
bill. DCBS is the Oregon Department of Consumer & Business Services.
2010 Special Session
Payday
and title loans - SB 993. This bill separated laws regulating
payday lenders and title lenders from those regulating traditional consumer finance lenders.
It didn't make any policy changes to the licenses for any such lenders. The law took effect on
passage - 03/04/2010. (2010 Or Laws ch. 23)
Rights
of tenants in foreclosed property - SB 1013. This bill clarifies that the existing requirement
that the trustee of a property in foreclosure must provide the notice of sale to residential
tenants of the foreclosed property and also prescribes the language of the required notice. It
exempts a purchaser of a foreclosed residential property at a trustee's sale from the obligation
to return a security deposit or prepaid rent to any tenant that has chosen to apply prepaid rent
or a security deposit to their rent obligation,. The law took effect on passage - 03/04/2010
(2010 Or Laws ch. 28)
Use
of credit history for employment purposes – SB 1045. The “Job Applicant
Fairness Act” limits use of credit history for employment purposes. With specific exemptions,
the bill makes it illegal for an employer to use information in the credit history of an applicant
for employment or for an employee, or to refuse to hire, discharge, demote, suspend, retaliate
or otherwise discriminate against an applicant or employee for a promotion, or related to the
compensation for or conditions of employment. Credit history is defined as any communication
of information by a consumer reporting agency that bears on a consumer’s creditworthiness,
credit standing, or credit capacity. The Bureau of Labor and Industries can take actions for
violations of this law and individuals can pursue a civil action in circuit court. The specific
exceptions from the bill are for financial institutions, public safety offices, and other employment
if credit history is job-related and use of the credit history is disclosed to the job applicant
or employee. The law will take effect on July 1, 2010. (2010 Or Laws ch. 102)
Affidavits
for loan modification - HB 3610. This bill revises the requirements of SB 628
(2009) that required notices to be sent to a borrower upon notice of default on a residential
trust deed with information about loan modifications. That law also required a trustee to record
an affidavit that they had complied with these requirements. This bill specifies that the trustee
must file the affidavit at least five days before the date of a residential foreclosure sale.
If a lender determines that a borrower is not eligible for a loan modification, the bill requires
that the lender give the borrower an explanation of how the lender calculated that borrower was
not eligible. The bill also makes other technical changes. The law will take effect on 05/27/2010.
(2010 Or Laws ch. 40)
Registration
of appraisal management companies - HB 3624. The bill requires appraisal management companies
to register with the Department of Consumer and Business Services and file a $15,000 surety bond
or irrevocable letter of credit and the department may require applicants to provide fingerprints.
The bill prohibits appraisal management companies from attempting to influence appraisals or
substantively alter completed appraisal reports. The department must adopt rules to require appraisal
management companies to establish dispute resolution process and ahs authority to suspend or
revoke registration of and impose civil penalties on appraisal management companies. The law
took effect on 03/23/2010. (2010 Or Laws ch. 87)
Pawnbroker
pledge loans - HB 3629. This bill makes technical changes to pawnbroker laws. It clarifies
that a pledge loan renewal can be 60 days or longer. The bill changes the definition of a pledge
loan "renewal" to also include instances when a consumer pays a "portion"
of the principal, interest, and fees on the loan and accepts another pledge loan from the pawnbroker
on the same pledge item on the same day. It also clarifies that the grace period for a pledgor
begins 30 days after the mailing date, rather than delivery date, of a forfeiture notice send
via USPS mail for a loan of more than $500 but less than $1,500. The law took effect 03/04/2010.
(2010 Or Laws ch. 14)
Sales
of foreclosed property - HB 3656. When a homebuyer does not qualify for a single loan
to cover the purchase price of a home, the buyer may qualify for an "80/20" loan --
essentially two different loans secured by one property. Recent court cases have allowed the
junior creditor to sue for remaining deficiencies after the property has been sold at foreclosure.
This bill clarifies HB 3400 (2009) by preventing the holder of the second loan from suing for
restitution when: a second loan was part of the purchase or repurchase transaction as the loan
which is being foreclosed, and when the second loan was owed to or originated by holder of the
mortgage being foreclosed or its affiliate. It also clarifies language relating to a deficiency
action. Effective on 03/10/2010. (2010 Or Laws ch. 48)
Credit
unions public funds pool – HB 3700. This bill allows credit unions to receive deposits
of public funds in excess of the federally-insured amount of $250,000, similar to the authority
for banks. It sets up a public funds pool, administered by the State Treasurer. The program apply
to public funds on deposit on or after January 1, 2013. (2010 Or Laws ch. 101)
Unlawful
Trade Practices Act extended to loans and extensions of credit - HB 3706. This bill includes
loans and extensions of credit in definition of what constitutes "real estate, goods or
services" for purposes of Unlawful Trade Practices Act (with the exception of pawnbroker
pledge loans which are still excluded). The Unlawful Trade Practices Act (ORS 646.605 to 646.656)
is Oregon's primary consumer protection law. It helps protect consumers from businesses that
fail to deliver all or a portion of goods or serves as promised, cause a likelihood of confusion
or misunderstanding about products or services, use deceptive representations or designations,
represent goods as meeting standards they do not, and making false or misleading representations
about products or services. The bill adds mortgage bankers, mortgage brokers, mortgage loan originators,
and consumer finance lenders. The bill requires the Attorney General to confer with the Department
of Consumer and Business Service regarding rulemaking and enforcement actions. (2010 Or Laws
ch. 94)
2009 Regular Session
Repeal
Certification of Sellers of Travel - SB 109. The bill eliminates a voluntary certification
for Associations of Sellers of Travel. The certification was no longer used and there were no
certified associations.
Debt
collection practices - SB 328. This bill allows the Attorney General to enforce debt collection
statutes and to investigate instances of unfair debt collection practices, such as making threats
or calling a borrower repeatedly or at unreasonable hours.
Credit
unions - SB 438. The bill creates a new definition for "organization" for defining
a credit union field of membership. This allows a corporation, limited liability company, or
association, and its directors, employees, or volunteers located in a geographic area to qualify
as an organization. The bill increases the maximum loan a credit union may make to member of
the credit unions' management without board of directors approval, from $25,000 to $100,000,
and limits the combined amount of loans to all such individuals to 10 percent of the credit union's
assets. The bill also makes several technical changes.
Foreclosure
prevention - SB 628. This bill amends HB 3630 (2008 Session) regarding foreclosure notifications.
It adds a requirement that a lender or loan servicer must notify a homeowner facing foreclosure
of their right to request a loan modification, including the opportunity for a meeting (face-to-face
or by phone) and requires the lender/loan servicer to assess whether the borrower is eligible
for a loan modification.
Garnishment
of exempt funds - SB 731. The bill provides garnishment protections for exempt funds such
as Social Security benefits, veteran's benefits, workers' compensation benefits, and unemployment
benefits. Consumers whose benefits are directly deposited in their accounts will not be forced
to go to court to recover exempt funds since the funds won't leave the consumer's account.
Tenants
in foreclosure - SB 952 (and Sec 1. HB 3004). These bills require advance notice of the foreclosure
proceedings and providing protections related to leases and security deposits. The notice will
provide information about tenants' rights and assistance resources.
Life-settlement
insurance transactions - SB 973. The bill provides additional protections for consumers,
particularly seniors, who buy additional life insurance for the purpose of selling or transferring
the policy to investors. It requires additional disclosures, protects a consumer's personal financial
and medical information and bans certain types of life-settlement transactions.
Mortgage
lending practices - HB 2188. This bill prohibits lenders from making negative amortization
loans without regard to the borrower's ability to repay, and requires mortgage bankers, mortgage
brokers, and loan originators to verify the borrower's income and assets on which the mortgage
lender relies when determining ability to repay such loans. It also prohibits a negative amortization
loan from having a prepayment penalty after the first 24 months.
The bill requires that when a lender advertises or solicits in a language other
than English, and conducts a significant part of the communication about a mortgage loan in that
language, the lender must provide the borrower with three translated disclosures: the federal
"good faith estimate" required by the Real Estate Settlement Procedures Act (RESPA);
the Truth in Lending Act (TILA) disclosures; and a statement explaining that the loan documents
will only be provided in English and advising the borrower to obtain assistance with any necessary
translations. The department will be providing translations of the required disclosures in Spanish,
Russian, and Vietnamese.
Licensing
of mortgage loan originators - HB 2189. This bill authorizes Oregon to participate in a national
licensing system for mortgage loan originators who work for mortgage bankers, mortgage brokers,
and consumer finance lenders. It allows the department to ensure that applicants for this license
have met education requirements, passed background and credit checks, following the laws in other
states, and are adequately covered by surety bonds. The bill also provides protections for borrowers
by allowing the department to enforce updated federal laws regarding disclosures to borrowers
and restrictions on misleading advertising.
Debt
management services - HB 2191. This bill revises the current registrations for debt consolidating
and credit repair services to include a registration requirement for all types of debt management
providers, including debt settlement companies and loan modifiers. It prohibits misleading advertising,
requires specific disclosures, limits fees that can be charged for these services, prohibits
upfront fees, and expands the authority for debtors the right to cancel contracts.
Financial
regulation - HB 2199. This bill authorizes DCBS to enter into an information sharing agreement
with the Financial Crime Enforcement Network (known as "FinCEN"), a division U.S. Treasury
division; changes calculation and timing of the APR limit for consumer finance lenders; eliminates
30-day posting requirement for consumer finance license applications; separates fee rule making
for banks, credit unions, and consumer finance; and changes bank holding company reporting.
Debt
buyers exempt from registration - HB 2307. The bill allows a person to buy debt to pursue
collection of the debt without being registered as a collection agency, as long as the debt buyer
does not have any obligation to pay any of the proceeds collected to the original debt holder.
The bill was intended to resolve outstanding uncertainties related to a 2004 bankruptcy court
decision [In re Krysl, 304 B.R. 425 (Or. 2004).
Pawnbroker
fees and notices - HB 2753. This bill authorizes a new fee of up to $3 for replacing a lost,
stolen, or destroyed pawn ticket; increases the storage fee to 3%, with a new cap of $100; and
clarifies that the $3 fee on a firearm pledge loan may only be charged on new loans. It changes
forfeiture notice requirements and defines when a pledge loan is considered a "renewal."
It allows local governments that regulate pawnbrokers to impose up to $1.00 on each pledge loan
(except for renewals) to pay for costs of administering and enforcing local government tracking
systems.
Deficiency
judgments after foreclosure - HB 3004. This bill prevents some lenders that foreclosure on
borrower with an 80/20 loan from collecting from the second loan when the home sells for less
than what the borrower owes. Prior to the mortgage lending crisis, many homebuyers financed 80
percent of the purchase price with a mortgage and trust deed and the remaining 20 percent with
second mortgage. However, such arrangements did not have the same protections under Oregon's
foreclosure laws as borrowers with a single mortgage loan. This protection from deficiency judgments
only applies when both loans were taken out at the time of the purchase and are both held by
the same lender.
2008 Special Session
Regulation
of loan originators – SB 1064. The bill was a recommendation from the Governor’s
Mortgage Lending Work Group. It addresses the actions of “loan originators” -- loan
salespeople who are employed by licensed mortgage bankers or mortgage brokers and directly negotiate
terms and conditions of mortgage loans with borrowers. The bill adds negligence or incompetence
to the current list of prohibited conduct by a loan originator. It allows the Department of Consumer
and Business Services to suspend or bar a loan originator from working for a licensed Oregon
mortgage broker or mortgage banker if the loan originator has violated Oregon mortgage lender
law, been dishonest or incompetent while conducting a transaction, or has failed to account for
all funds from a mortgage loan transaction.
The bill requires the Department to enhance its current online
information to provide consumers with a registry with at least 10 years of
information about loan originators, including justified complaints and any
enforcement actions that have been taken. It also requires mortgage bankers
and mortgage brokers to annually file information about their residential
mortgage lending activity with the Department.
Regulation
of home mortgage loan foreclosure consultants and equity purchasers – HB
3630. The bill was a recommendation from the Governor’s Mortgage
Lending Work Group. It adds protections for consumers at risk of foreclosure
by regulating both “consultants” who offer to help homeowners avoid
foreclosure, and “equity purchasers” who acquire a financial interest
in the property.
The bill requires foreclosure consultants to provide the
homeowner with a written contract that includes plain language disclosures;
limits the compensation such consultants can receive. It also prohibits foreclosure
consultants from taking an interest in a residence in foreclosure or default
where the consultant had a contract for services. The foreclosure consulting
contract must include a full description of services to be provided and the
total costs of the contract.
It also requires equity purchasers to provide the homeowner
with a written contract in plain language; it requires equity purchasers to
ensure the homeowner has the ability to buy back the home; it entitles the
homeowner to a share of proceeds if the home is re-sold quickly; and it requires
the transfer to take place in escrow. The homeowner has rights to cancel a
foreclosure consulting or an equity purchasing contract.
For those facing foreclosure, the bill will require the homeowner
to be sent a notice, in plain language, with information about how to stop
the foreclosure process; the amount needed to bring the loan current; and
sources of counseling and advice. It also will require commercial mortgage
lenders to provide a toll-free telephone number for the homeowner to get loan
delinquency and repayment information and for person-to-person consultation
to discuss the payment and loan term negotiation and modification options.
2007 regular session
Securities
enforcement - SB 119. The bill authorizes the Attorney General, with
the consent of the Director of DCBS, to investigate and prosecute violations
of the Oregon Securities Law in certain instances. The Attorney General will
be able to pursue alleged violations involving companies whose securities
are listed on the national stock exchanges or where the Attorney General is
also pursuing an investigation or litigation regarding unlawful trade practices,
racketeering, or antitrust.
Variable
annuities - SB 257. The bill makes variable annuities, currently regulated
as insurance, also subject to state securities regulation. The effect is to
create broader enforcement tools, and to give DCBS better ability to require
supervision of brokers who sell annuities.
Identity
theft protection - SB 583. The bill protects Oregonians from identity
theft by providing that those who own, maintain, possess or dispose of personal
data must safeguard that data from unauthorized use. Consumers must be notified
when their personal information is subject to a security breach. Every Oregonian
will have the right to request a security freeze on his or her credit file
maintained by a credit reporting agency, and to temporarily lift the freeze
for a period of time. Use and display of Social Security numbers is restricted.
DCBS is given the authority to enforce the law.
Credit
union service to the poor - SB 592. The bill allows a state-chartered
credit union that predominantly serves low-income members to receive a low-income
designation. With this designation, nonmembers may make deposits and hold
shares in the credit union and the credit union may accept secondary capital
accounts. The Director of the DCBS will set guidelines for determining whether
the credit union will qualify for this designation. The bill also limits the
fees credit unions can charge to cash checks, and allows credit unions to
sell checks, money orders, and other money transfer instruments to non-credit
union members.
Regulation
of check-cashing businesses - HB 2202. The bill limits check-cashing
fees to the greater of $5 or 2 percent for checks issued by the federal 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. The bill also establishes licensing requirements
for check-cashing businesses.
Regulation
of payday lending - HB 2203. The bill extends Oregon's payday lending
laws to all paydays loans made to borrowers in Oregon, including Internet
lenders. In addition, the bill allows DCBS to implement and require payday
and title loan companies to participate in a statewide lender database to
ensure compliance with the rollover and seven-day wait limitations applicable
to these loans.
Fees
and interest rates on short-term title loans - HB 2204. The bill limits
interest rates and fees on vehicle title loans to match the caps on payday
loans (36 percent per annum), 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 7 days of the expiration of the
previous title loan. Title loans will include "sale-leaseback" arrangements.
Updated
pawnbroker regulation - HB 2220. The bill allows DCBS to determine
the frequency of examinations of licensed pawnbrokers, updates record-keeping
requirements, allows pawnbrokers to keep records electronically, eliminates
the residency requirement for pawnbrokers, and eliminates the requirement
that a license application be posted for 30 days before a license is issued.
The bill also allows a pawnbroker to redeem a pledge or provide a new pawn
ticket within five days of receiving notice from a customer that their pawn
ticket is lost, destroyed, or stolen.
Financial
education - HB 2584. The bill creates a task force to make recommendations
on how to improve civics and financial education in kindergarten through the
12th grade. The task force will report to the Legislature's interim education
committees by October 1, 2008, with a summary of findings and legislative
recommendations.
Pre-need
practices - HB 2864. The bill addresses a number of business practices
involving the sale of funeral-related items and services prior to the time
of need. Significant changes include reporting requirements for the purchase
and storage of merchandise, clarification about the termination and payout
of pre-need trust accounts, clarification of DCBS regulatory authority, and
miscellaneous definitions and clarifications of terminology used in these
laws.
Consumer
finance and short-term loan interest rate and fee limits - HB 2871.
The bill caps interest rates for conventional consumer finance loans as well
as payday and title loans. 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 also 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.
2006 Special Session
Senate
Bill 1105 Enrolled - SB 1105 impacts those consumer finance lenders
who make short-term unsecured loans to consumers repayable on the consumer's
next payday, and consumers who obtain those loans.
The bill makes the following modifications to current law:
- Limits the interest rate that may be charged on a loan or a renewal to
36% per annum
- Permits an origination fee to be charged on each new loan of no more than
$10 per $100 loaned
- Limits the lender's remedies for dishonored checks or insufficient funds
to a maximum fee of $20 per loan transaction plus any fee charged to the
lender by its financial institution
- Other than the interest and fees described above, prohibits charging a
consumer any fee or interest on a payday loan
- Sets a minimum term of 31 days for each loan or renewal of that loan
- Reduces from three to two the number of times a loan may be renewed
- Prohibits the lender from making a new loan to a consumer within seven
days of the expiration of a previous payday loan
- Disallows seeking or recovering statutory damages and attorneys fees for
a dishonored check under ORS 30.701
These modifications apply to payday loans made or renewed on or after July
1, 2007.
The Director of the Department of Consumer and Business Services is given
authority to adopt rules to carry out and enforce these modifications.
2005 legislation
The Division of Finance & Corporate Securities sponsored five pieces
of legislation during the 2005 session.
Enforcement
of franchise statutes - SB121 - The Division of Finance and Corporate
Securities (DFCS) regulates the offering and selling of franchises in Oregon.
Currently, the only enforcement tool available to DFCS is a civil lawsuit.
This bill would provide greater protection to consumers by giving DFCS the
authority to use quicker and less costly remedies by issuing cease and desist
orders and civil penalties to deter violations.
Update - 6-29(S) Governor signed.
Enforcement
powers for non-depository programs - SB120 - DCBS regulates a number
of nondepository financial institutions such as collection agencies, consumer
finance companies, mortgage lenders, and pawnbrokers. The enforcement tools
available to DCBS vary in these programs. This bill will provide greater consumer
protection by giving DCBS the authority to issue subpoenas and cease and desist
orders for all non-depository programs, and to collect the costs of investigation.
Update - 6-29(S) Governor signed.
Repeal
of DFCS non-depository registration provisions - HB2173 - The electronic
(digital) signature statutes give DCBS the authority to certify persons who
issue digital certificates. The intent of the statutes was to enhance the
use of the Internet by proving an assurance that the person who signed the
document is the person he or she claims to be and that the document has not
been altered. Because participation in the program is voluntary and the use
of encryption systems has replaced whatever need that existed to certify entities,
this program should be eliminated.
This bill also eliminates registration provisions for international trade
consultants who assist private businesses, promote Oregon products, and assist
businesses in dealing with international law and markets. There is no enforcement
authority and registration is voluntary. There currently is only one registrant.
Update - 6-29(S) Governor signed.
Interest
on escrow impounds - HB2153 - Lenders are required to pay interest
on escrow impounds from real estate borrowers intended to cover property taxes
and insurance. The interest rate is currently tied to a listing by the Federal
Reserve that has been discontinued. This bill revises the statute to replace
this reference to the interest rate as published by the U.S. Treasury, Bureau
of Public Debt.
Update - 3-11(H) Governor signed.
Oregon
Capital Corporation repeal
- HB2161 - In 1987 the Oregon Legislature created a mechanism to help
generate a find for risk capital investments to stimulate the Oregon economy.
Because the finding never occurred, the Oregon Capital Corporation was never
formed by its August, 1989 deadline. Therefore, this statute is obsolete and
should be repealed.
Update - 5-25(H) Governor signed.
2004 legislation
The following are proposed legislative concepts that the division of finance
and corporate securities sponsored during the 2005 legislative session.
Securities Law Update -
LC-359 - Authorizes Director of Department of Consumer and Business
Services to issue cease and desist order and to impose civil penalty for improper
conduct in franchise transactions.
2003 Legislation
The Oregon legislature passed several bills affecting the industries regulated
by the Division of Finance and Corporate Securities during its 2003 regular
session. Lawmakers addressed a variety of issues ranging from licensing loan
originators to raising securities fees to the national midpoint.
HB
2711A - Modifies provisions relating to child support payments by
collection agencies. This bill increases the fee that a private collection
agency may charge for collecting child support obligations from 20% of each
support payment to 29% and requires the collection agreement be printed in
at least 12-point type that provides information on the fees and penalties
in the contract and the length of the contract and how the contract could
be terminated. The bill eliminates the provision that requires the obligor
to renew every six months the use of a collection agency.
SB
159A - Payday lending - Incorporates existing administrative rule
provisions relating to payday loans, similar to relating to title loans enacted
in the 2001 Legislative session. This bill will provide regulatory parity
between the two types of short-term lending activities.
HB 2682A - This bill requires criminal background checks of loan
originators and requires DCBS to adopt rules specifying the categories of
criminal convictions that will prevent a person from acting as a loan originator.
The bill also requires insurance agents and insurance consultants who are
employed full time as loan originators to comply with loan originator training,
examination, and continuing education requirements.
SB
248 - Pawnbroker Regulation - Provides that only the form of a surety
bond be approved by the Department of Justice rather than each individual
bond for the Pawnbroker program; and deletes the mandated annual examination
of pawnbrokers in favor of a biennial field examination supplemented by off-year
filings by each licensed pawnbroker. These amendments are consistent with
instructions of the 2001 Legislative Assembly to reduce the cost of pawnbroker
regulation.
SB
199 - Pre-Need Funeral Trusts Bonds - This bill removes an exception
in existing law governing a person with a claim against a letter of credit
or surety bond for certain providers of prepaid funeral services. The bill
does not change policy but removes a paradox in statutory construction, which,
if strictly followed as worded, deprives persons of a right of action against
an endowment cemetery's bond or letter of credit intended to protect consumers
in the first place.
SB 200A - Pre-Need Funeral Plan Law Clarification - Requires annual
reports from master trustees as well as providers of pre-need plans; requires
master trustees to pay the costs of exams; extends the law to cover providers
and trustees doing business without having secured the requisite certification
or registration; permits the director to suspend or revoke certificates and
registrations of insolvent providers and trustees; makes the director's referrals
to local and federal law enforcement authorities discretionary instead of
mandatory; and, creates criminal sanctions for providers and master trustees
who misuse trust funds.
SB
194 - Securities Law Update - Deletes obsolete references to securities
registration and licensing covered under federal law; deletes confusing references
to securities licenses of persons employed by mortgage brokers and bankers,
and clarifies language in securities licensing provisions to provide that
investment advisor representatives, broker-dealers and salespersons are subject
to comparable treatment under the law. This bill cleans up technical problems
but makes no substantive changes.
HB
3656 - Requires Director of DCBS to adopt rules setting fees
for registration of securities and licensing of broker-dealers, investment
advisers, and salespersons at the national midpoint for such fees.
