Oregon Reinstates Usury Ceiling

SALEM, Ore. – The state Senate yesterday approved a 36% cap on all consumer loans, reinstating a state usury law and completing a package of bills that eliminate triple-digit interest rates charged by payday and car title lenders. The legislation transforms Oregon from one of the most payday friendly states in the nation to one of the most strictly regulated -- with the exception of 11 states that effectively ban payday lending. It restores a usury law, which legislators scrapped in 1981 during a recession when inflation and interest rates skyrocketed. The new law caps interest rates on all consumer loans at 30 points above the Federal Reserve discount rate, now at 6.25%. The bill goes back to the House for a vote on minor housekeeping changes, then to Gov. Ted Kulongoski, who has said he will sign it into law.