Leave the payday loan industry alone
- J. Allen Green
- Beaverton Valley Times - Opinion
The city is off-base trying to regulate an already regulated industry
(Soapboxes are guest opinions from our readers, and anyone is welcome to write one. J. Allen Green is a Beaverton resident.)
In recent news articles on the misguided attempt of Portland, Gresham, Troutdale, Silverton, and now Beaverton, to regulate the terribly misunderstood and wrongly maligned payday loan industry, Beaverton City Councilor Dennis Doyle, however well-intentioned, makes some statements that highlight the gross ignorance that clouds this issue.
First, he seems to feel that legislating these 'predators' is necessary to the welfare of the city: 'I'm glad the council took this one on. It's essential that we get this done.'
And, he adds, 'This gives immediate relief.'
Relief? What relief? The proposed regulation that now seems destined for passage at the next council meeting on July 10 - in one of the most powerful examples of bureaucratic prejudice, ignorance and waste of time (at taxpayer expense) that I have ever witnessed in my 66 years as a resident of Oregon - does absolutely nothing for citizen-borrowers that the practices of the industry don't already provide. It's all virtually 'sound and fury, signifying nothing.'
- The mandatory 24-hour right of rescission has always been a part of most lender contracts anyway, and, as one could imagine, is hardly ever exercised by the consumer.
- The mandatory two-month payment plan for debtors who have run out of rollover options has also been a common, alternative 'soft landing' offered voluntarily by the industry. Furthermore, it is the practice of lenders not to add any interest during the extended repayment period.
- The mandatory payment of 25 percent of the principal, plus accrued interest, before rolling over a loan, will force some consumers who simply don't have the 25 percent in their pockets to take out another loan from a different lender. Certainly no relief there - just another hassle for the borrower to deal with. Thanks, but no thanks, Councilor Doyle.
Councilor Doyle wrongly contends that Oregon is 'one of a handful of states that don't control quick-loan companies.' (Apparently, Doyle isn't aware that the Oregon Division of Finance and Corporate Securities has regulated the industry for many years.)
He objects to interest rates much higher than those charged at other lending institutions. 'I'd like to see more banks and credit unions stepping up to help people with a short-term need.' (Apparently, Doyle doesn't know that US Bank, for example, does offer such loans, and charges interest at rates ranging from 104 percent to 3,650 percent APR, depending on how much time expires before repayment of the loan, a maximum of 35 days. Also, US Bank's policy does not comply with the first two items above, pertaining to the proposed city ordinance, not to mention portions of SB 1105, recently passed by the Oregon Legislature.)
Doyle also exclaims, referring to the Portland ordinance after which the Beaverton ordinance is modeled, 'It was a proven ordinance, and we didn't want to do anything that was going to end up in court.'
Good luck, councilor. Once US Bank is alerted to the fact that the proposed ordinance renders their checking account advance agreement illegal in Beaverton, I can only hope that the city will demonstrate more wisdom than it has thus far demonstrated.
I can only hope that the city will take the smart road and rescind the ordinance, rather that engage in another court battle with another huge corporation that has enough money, if it so chooses, to litigate its way into the next century (shades of Nike?).
I can only hope that the city will avoid squandering more of our precious, limited taxpayer money - money that could have been saved with just a little homework and forethought.
I can only hope that the city will then engage in thoughtful discussions with the payday lending industry itself, rather than with the industry's misguided detractors (well-intentioned do-gooders, no doubt) from the social services sector.
Better yet, I hope the city will wake up before July 10 from their obvious state of confusion and ignorance on this matter and choose to let this proposal die before it takes on an ignominious life of its own.
And in the future, I hope to see 'Dennis the Menace' at his pranks only in the funnies, and no longer up to his 'funny business,' however well-intentioned, in the halls of our illustrious Beaverton City Council.