That's it! The hearing is over. It was a bit rushed at the end but the bill will be picked up again on Monday. More details to come.
They're kicking us out of the room because the next hearing is starting. Gotta go.
Wednesday, March 28, 2007
Cascade Policy Institute testifies
John Charles of the Cascade Policy Institute just gave what I have to say is some wacky testimony. First, he dismissed the idea that anyone could be unhappy with a payday or car title loan. Then he echoed the testimony that one of his colleagues gave last week saying that the City of Portland charges higher interest rates for past due water bills. Um, this testimony was discredited last week, from what we understand. But it seems CPI isn't letting the facts get in the way of a good soundbite.
FINALLY! The industry finds a customer to testify in their favor
We just heard testimony from a woman who took out a $400 payday loan to buy a washer and dryer 10 years ago and she was very happy to pay $100 for that loan.
More testimony
Okay, Kari. I agree with you. It's tough to blog live. But it's also fun so I'm going to keep going.
Mary Ann Olson has testified about her experience with the predatory loan industry. She ended up paying $2,000 for a $190 loan she took out to purchase orthopedic shoes. I've read industry talking points that claim she's a "bad borrower." Well, if she is, then 90 percent of your borrowers are, because most that's how many people end up taking five or more loans per year...which is exactly what the industry encourages.
Mary Ann also went off her written testimony and called out NW Title Loan's ad about the senior citizen who took out a title loan to pay for insulin. She said the ad was dishonest, there are other services, and that it's an insult to people living with diabetes.
Maureen Slon, chair of St. Vincent de Paul Voices of the Poor testified after Mary Ann. She said, "I am cocerned that the payday loan lenders are positioning themselves as saviors of the low-income Oregonians who coe to them in time of crisis. Let me be clear, offering someone a 400 percent loan or giving someone the opportunity to put their only transprotation to work on the line is not a solution to a family's financial crisis. It is plainly immoral to sell teh promise of easy money and qick cash knowing that the outcome is likely to be an even more profound crisis."
Chair Paul Holvey is getting ready to wrap things up. It's nearly 3:00.
Mary Ann Olson has testified about her experience with the predatory loan industry. She ended up paying $2,000 for a $190 loan she took out to purchase orthopedic shoes. I've read industry talking points that claim she's a "bad borrower." Well, if she is, then 90 percent of your borrowers are, because most that's how many people end up taking five or more loans per year...which is exactly what the industry encourages.
Mary Ann also went off her written testimony and called out NW Title Loan's ad about the senior citizen who took out a title loan to pay for insulin. She said the ad was dishonest, there are other services, and that it's an insult to people living with diabetes.
Maureen Slon, chair of St. Vincent de Paul Voices of the Poor testified after Mary Ann. She said, "I am cocerned that the payday loan lenders are positioning themselves as saviors of the low-income Oregonians who coe to them in time of crisis. Let me be clear, offering someone a 400 percent loan or giving someone the opportunity to put their only transprotation to work on the line is not a solution to a family's financial crisis. It is plainly immoral to sell teh promise of easy money and qick cash knowing that the outcome is likely to be an even more profound crisis."
Chair Paul Holvey is getting ready to wrap things up. It's nearly 3:00.
Very important testimony from a veteran
We snagged a copy of the testimony of Elisabeth Hagens, a military veteran, who points out teh coming unfairness in our system. It looks long in print, but if you heard it live or watched it on television, you would have seen that her clear, calm voice silenced the room. That doesn't happen very often.
_______________
Hello Chair Holvey and members of the committee, for the record my name is Elisabeth Hagens. I am a retired Master Sergeant of the Oregon Air National Guard. I served 20_ years in the US military. I proudly have two sons who have also served, one in the war in Iraq.
I am here to testify in favor of House Bill 2871, which will afford all Oregonians the same protections against predatory lenders that active military families will soon enjoy.
Last year, Congress passed and the president signed, the Military Lending Act, which will prohibit any lenders from charging a military member on active duty or his or her immediate family, more than 36 percent interest. The cap will go into effect in October of this year.
Congress acted when the Department of Defense and consumers groups called for the cap because payday loan shops and car title lenders were clustering around military bases, preying on young soldiers and their immediate families who too often make too little money and are too far from home to count on traditional support systems.
In an analysis of the impact on predatory lending on the military, the Department of Defense presented evidence that clearly showed predatory lending was having a negative impact on national security and military readiness.
The Defense Department estimates one in five active-duty service members is a payday loan borrower and that "predatory payday lending costs military families over $80 million in abusive fees each year." Since September 11, 2001, nationwide more than 51 percent of Army Guard members and 31 percent of Air Guard members have been activated to meet homeland and overseas demands.
Capt. Mark D. Patton, commanding officer at the Point Loma Naval Base in California, testified before Congress that between 2000 and 2005, the number of sailors and Marines who had their security clearances denied or revoked because of financial problems increased by 1,600 percent.
"There is no enemy that our Navy is more passionate about defeating than one who targets our own sailors," he said.
The Department of Defense also made clear that limited, targeted interest rate caps particular loan types will not work, and, in fact, invoked Oregon as an example.
And that is why our active military members will soon be protected from predatory lenders by a comprehensive 36 percent interest rate cap. This is a very good thing.
Unfortunately many military personnel will not be protected by the Military Lending Act. As you are aware, the National Guard and Reserve is made up of citizen soldiers. This means that their main occupations are outside of the military structure. They are warehousemen, construction workers, students, doctors, and professionals of all types. Many self employed. The new law does not apply to retired or military members when they are not on active duty status. They leave good paying jobs to serve their country, and often receive less than they would earn in their regular jobs. They often return to their civilian lives deep in debt and unable to recover financially. Today, with HB 2871, you have the opportunity to extend a level of protection to the men and women of Oregon’s National Guard and Reserve who return from active duty in Iraq and Afghanistan. I urge you to vote yes on HB 2871 and send the message that all Oregonians – including Oregon veterans and our citizen soldiers – deserve access to fair and affordable credit.
_______________
Hello Chair Holvey and members of the committee, for the record my name is Elisabeth Hagens. I am a retired Master Sergeant of the Oregon Air National Guard. I served 20_ years in the US military. I proudly have two sons who have also served, one in the war in Iraq.
I am here to testify in favor of House Bill 2871, which will afford all Oregonians the same protections against predatory lenders that active military families will soon enjoy.
Last year, Congress passed and the president signed, the Military Lending Act, which will prohibit any lenders from charging a military member on active duty or his or her immediate family, more than 36 percent interest. The cap will go into effect in October of this year.
Congress acted when the Department of Defense and consumers groups called for the cap because payday loan shops and car title lenders were clustering around military bases, preying on young soldiers and their immediate families who too often make too little money and are too far from home to count on traditional support systems.
In an analysis of the impact on predatory lending on the military, the Department of Defense presented evidence that clearly showed predatory lending was having a negative impact on national security and military readiness.
The Defense Department estimates one in five active-duty service members is a payday loan borrower and that "predatory payday lending costs military families over $80 million in abusive fees each year." Since September 11, 2001, nationwide more than 51 percent of Army Guard members and 31 percent of Air Guard members have been activated to meet homeland and overseas demands.
Capt. Mark D. Patton, commanding officer at the Point Loma Naval Base in California, testified before Congress that between 2000 and 2005, the number of sailors and Marines who had their security clearances denied or revoked because of financial problems increased by 1,600 percent.
"There is no enemy that our Navy is more passionate about defeating than one who targets our own sailors," he said.
The Department of Defense also made clear that limited, targeted interest rate caps particular loan types will not work, and, in fact, invoked Oregon as an example.
And that is why our active military members will soon be protected from predatory lenders by a comprehensive 36 percent interest rate cap. This is a very good thing.
Unfortunately many military personnel will not be protected by the Military Lending Act. As you are aware, the National Guard and Reserve is made up of citizen soldiers. This means that their main occupations are outside of the military structure. They are warehousemen, construction workers, students, doctors, and professionals of all types. Many self employed. The new law does not apply to retired or military members when they are not on active duty status. They leave good paying jobs to serve their country, and often receive less than they would earn in their regular jobs. They often return to their civilian lives deep in debt and unable to recover financially. Today, with HB 2871, you have the opportunity to extend a level of protection to the men and women of Oregon’s National Guard and Reserve who return from active duty in Iraq and Afghanistan. I urge you to vote yes on HB 2871 and send the message that all Oregonians – including Oregon veterans and our citizen soldiers – deserve access to fair and affordable credit.
Payday Lenders Claim they are Neutral on HB 2871
Oh, this was fun. Larry Harvey of Consumer Financial Services of Oregon - the trade association for Oregon Payday Lenders - just testified and said that last year's Payday Loan Reform Act will put them out of business so they won't be around to deal with the impacts of HB 2871.
Sure....um, not. We were talking to Jonas Monast from Center for Responsible Lending about this. He's here fro North Carolina to give a national perspective on the issue. He says the lenders always say this...they cry wolf and claim that any regulation will put them out of busienss...and then they keep on going and keep on charging their ridiculous interest rates.
And we'd also like to point out that Advance America, the largest payday loan company in the country, had record profis last quarter at the same time states are reinstating usury caps in response to their legal loan sharking.
We're just saying.
Up next, Elisabeth Hagens, a veteran who will point out that military families are targeted by predatory lenders adn Congress has passed a cap for active military members, but not non-active. We have a copy of the testimony and we'll post it.
Sure....um, not. We were talking to Jonas Monast from Center for Responsible Lending about this. He's here fro North Carolina to give a national perspective on the issue. He says the lenders always say this...they cry wolf and claim that any regulation will put them out of busienss...and then they keep on going and keep on charging their ridiculous interest rates.
And we'd also like to point out that Advance America, the largest payday loan company in the country, had record profis last quarter at the same time states are reinstating usury caps in response to their legal loan sharking.
We're just saying.
Up next, Elisabeth Hagens, a veteran who will point out that military families are targeted by predatory lenders adn Congress has passed a cap for active military members, but not non-active. We have a copy of the testimony and we'll post it.
Consumer Lending Testimony
Rick Parker of United Finance Co. is testifying. What's his beef with HB 2871?
Does United Finance want to charge more than 36 percent? Let’s go see what kind of services they offer…. http://www.unitedfinance.com/
Hmmmm….hard to tell. I just leaned over to Angela and asked her if they charge more than 36 percent for any loans. She said, “They claim that’s proprietary information and they won’t say.”
Does United Finance want to charge more than 36 percent? Let’s go see what kind of services they offer…. http://www.unitedfinance.com/
Hmmmm….hard to tell. I just leaned over to Angela and asked her if they charge more than 36 percent for any loans. She said, “They claim that’s proprietary information and they won’t say.”
Speaker Merkley's testimony
As he did in the news conference this morning, Speaker Merkley pointed out that all the states that don't have a uniform interest rate cap have a problem with payday and car title lenders charging triple digit interest. And he listed states that have tried in the past to do piecemial, targeted solutions to specific loan types: Pennsylvania, Texas, Illinois, for example and talked about some of the bizarre Frankenstein loan products that the lenders created in order to get around the laws.
He mentioned something called an "Open-ended" line of credit. That's a credit line that the loan shop holds open for you...for a fee. We've seen contracts on these loans that would make Tony Soprano blanch with shame. Advance America issued this credit line in Pennsylvania to get around a payday loan interest rate cap. They'd hold $500 for you, available to borrow at any time - but to have that privilege you have to pay $149.00 per month. Not techinically a "Payday loan," right? That's how they get around interest rate caps that don't incluce all consumer loans.
The Speaker also said, "for the last 2.5 weeks I’ve been in conversations with the consumer lending industry and my point has been if there is a way to close these loopholes that will solve the problems we’ve seen in other states, that’s a legimate point of consideration."
In other words, he's willing to listen, but the lenders are not interested in any reasonable regulations that might affect their profits and hurt their interest rates.
Oh, next up: industry lobbyists.
He mentioned something called an "Open-ended" line of credit. That's a credit line that the loan shop holds open for you...for a fee. We've seen contracts on these loans that would make Tony Soprano blanch with shame. Advance America issued this credit line in Pennsylvania to get around a payday loan interest rate cap. They'd hold $500 for you, available to borrow at any time - but to have that privilege you have to pay $149.00 per month. Not techinically a "Payday loan," right? That's how they get around interest rate caps that don't incluce all consumer loans.
The Speaker also said, "for the last 2.5 weeks I’ve been in conversations with the consumer lending industry and my point has been if there is a way to close these loopholes that will solve the problems we’ve seen in other states, that’s a legimate point of consideration."
In other words, he's willing to listen, but the lenders are not interested in any reasonable regulations that might affect their profits and hurt their interest rates.
Oh, next up: industry lobbyists.
Dingfelder got delayed on her way to the microphone and I can hear voices in the back of the room. When she sits down, Rep. Dingfelder says,
"I just want to made it known for the record I was accosted by a lobbyist on the way to the podium,"
The lobbyist was Mike Dewey, who is one of the industry lobbyists.
Dingfelder's comment got a laugh from the crowd – and that's clearly what she intended, but she also used humor to make an important point – the industry lobbyists are doing a full-court press to protect their profits.
Dingfelder points out that her district in Portland has seen an explosion of payday and car title loan shops in her district. She also describes why HB 2871 is necessary, and you'll hear it from other people as well – the lenders are simply evading the cap by remaking themselves in whatever incarnation allows them to continue charging 500 percent interest.
"HB 2871 is quite simply, a protection against usury," she said.
Next up: Speaker Merkley.
"I just want to made it known for the record I was accosted by a lobbyist on the way to the podium,"
The lobbyist was Mike Dewey, who is one of the industry lobbyists.
Dingfelder's comment got a laugh from the crowd – and that's clearly what she intended, but she also used humor to make an important point – the industry lobbyists are doing a full-court press to protect their profits.
Dingfelder points out that her district in Portland has seen an explosion of payday and car title loan shops in her district. She also describes why HB 2871 is necessary, and you'll hear it from other people as well – the lenders are simply evading the cap by remaking themselves in whatever incarnation allows them to continue charging 500 percent interest.
"HB 2871 is quite simply, a protection against usury," she said.
Next up: Speaker Merkley.
While we wait for the Predatory Lending Bill...
The committee administrator tells us HB 2871 should be up around 1:30. That seems optimistic given that testimony just started on the other bill. It will probably be a little longer than that.
While we wait, check out the FAQ on the Predatory Lending Cap.
And if you haven't signed the petition in support of HB 2871, do it now! Here's the link: http://www.facts-online.org/campaign/oregon_predatory_lending_cap
While we wait, check out the FAQ on the Predatory Lending Cap.
And if you haven't signed the petition in support of HB 2871, do it now! Here's the link: http://www.facts-online.org/campaign/oregon_predatory_lending_cap
In the hearing room
We're in the hearing room now. Things just got started. Before the gavel dropped, Rep. Donna Nelson (R-McMinnville) graciously greeted most of the people here in the crowded room.
Our priority bill – HB 2871 – has been moved to 2nd place on the docket behind HB 3076, which is relating to rapid-refund loans. Angela of OO is testifying in favor of the bill. I don't know how many of you out there know Angela, but she's been a great asset to Our Oregon. She came to us from the Oregon Food Bank and is a powerful advocate for people who need the system to be just a little more fair.
Our priority bill – HB 2871 – has been moved to 2nd place on the docket behind HB 3076, which is relating to rapid-refund loans. Angela of OO is testifying in favor of the bill. I don't know how many of you out there know Angela, but she's been a great asset to Our Oregon. She came to us from the Oregon Food Bank and is a powerful advocate for people who need the system to be just a little more fair.
This morning's news conference
The capitol is swarming with advocates today ready to testify in favor of House Bill 2871. Everyone's in a great mood. What a difference! For years Republican leadership in the House has turned a deaf ear to the faith community and other advocates who have been trying to stop legal loan sharking in Oregon. But because the payday loan industry had such a lock on the Republican leadership, we couldn't even get a hearing. If former Speaker Karen Minnish hadn't faced a tough re-election campaign in 2006, the Payday Loan Reform Act never would have been on the table for last year's special session, let alone been passed.
At the time, the payday loan industry promised they would find a way to get around the new law, and they have. That's why we need House Bill 2871, and under the new legislature, there is a good chance of passing it.
In fact, Speaker of the House Jeff Merkley pledged to close Oregon's loan shark loopholes with House Bill 2871 this morning at a news conference in the capitol. This is one of the few bills on which he is the chief sponsor.
"There is no legitimate reason why a lender should chart $1,000 interest on a $200 loan," Merkley said. "Those lenders prey on the dire financial circumstances of some Oregonians to line their own pockets."
House Bill 2871 is necessary, said the speaker, because payday lenders are reorganizing to avoid limits.
"As soon as we passed the cap on payday lenders last year, they announced their intention to skirt the law by exploiting loopholes," Merkley said. "It is time to close those loopholes for good."
The Speaker was joined by Gwen Curran, a volunteer from AARP who presented a poll showing that 75 percent of AARP members support the 36 percent cap on car title, payday and other consumer loans.
"AARP Oregon members clearly say payday loans don’t pay," said Curran.
Also speaking at the news conference was Bishop Paul Swanson of the Evangelical Lutheran Church in America and Jonas Monast, of the Center for Responsible Lending
Next up: The hearing starts at 1:00 pm. If the computer battery doesn't die, we'll be blogging live from there.
At the time, the payday loan industry promised they would find a way to get around the new law, and they have. That's why we need House Bill 2871, and under the new legislature, there is a good chance of passing it.
In fact, Speaker of the House Jeff Merkley pledged to close Oregon's loan shark loopholes with House Bill 2871 this morning at a news conference in the capitol. This is one of the few bills on which he is the chief sponsor.
"There is no legitimate reason why a lender should chart $1,000 interest on a $200 loan," Merkley said. "Those lenders prey on the dire financial circumstances of some Oregonians to line their own pockets."
House Bill 2871 is necessary, said the speaker, because payday lenders are reorganizing to avoid limits.
"As soon as we passed the cap on payday lenders last year, they announced their intention to skirt the law by exploiting loopholes," Merkley said. "It is time to close those loopholes for good."
The Speaker was joined by Gwen Curran, a volunteer from AARP who presented a poll showing that 75 percent of AARP members support the 36 percent cap on car title, payday and other consumer loans.
"AARP Oregon members clearly say payday loans don’t pay," said Curran.
Also speaking at the news conference was Bishop Paul Swanson of the Evangelical Lutheran Church in America and Jonas Monast, of the Center for Responsible Lending
Next up: The hearing starts at 1:00 pm. If the computer battery doesn't die, we'll be blogging live from there.
Tuesday, March 27, 2007
Heads up! Tomorrow is the first hearing in the House Consumer Protection Committee on HB 2871, the 36 percent predatory lending cap.
The hearing starts at 1:00 pm. You can listen or watch it live on the web, or you can check back here because we'll be posting live updates during the hearing!
The hearing starts at 1:00 pm. You can listen or watch it live on the web, or you can check back here because we'll be posting live updates during the hearing!
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