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http:// --> Ashland, Oregon HOME Valley & State Sports Nation & World Opinion/Editorial Classifieds Business Columnists Local Issues Obituaries Weather Archive Revels Etcetera Backpage Hot Topics Most Viewed Forum Photo Galleries Video Readers Polls O-Zone Online Games Movie Preview Special Sections Real Estate Guide Menu Guide Shakespeare Subscribe Contact Us Rate Card Place an Ad Featured Galleries: June 29, 2007 Judge says no to suspension of Oregon interest rate cap By AARON CLARK The Associated Press SALEM — A judge refused to issue an injunction Friday that would have temporarily blocked a new Oregon law that caps annual interest rates on consumer loans at 36 percent. Northwestern Title Loans, a Georgia-based car title lender with 17 stores in Oregon, asked Marion County Circuit Judge Paul Lipscomb to suspend the law for 10 days. The law goes into effect Sunday. Lipscomb said attorneys for Northwestern failed to demonstrate the law was unconstitutional and that the company would be likely to suffer irreparable harm without immediate relief. “The plaintiff has simply not met its particularly heavy burden at this early stage of these proceedings,” Lipscomb said in his decision. An attorney for Northwestern argued Friday that the law singles out car title lenders, forbidding them to make high-interest, short-term loans, but does not apply the same limits to banks and credit unions. “The infirmity is that it has created an unequal playing field,” said Joel Mullin. He said he believed banks and credit unions would begin to offer similar financial deals if car title lenders are barred from offering their services. “That is the trend, that is what we believe is going to be happening,” Mullin said. He said a marketer for the First Bank of Delaware, CashCall, that offered loans over the Internet at interest rates above 36 percent would continue to be allowed to operate in Oregon because out-of-state bank interest rates are protected under federal law. “We are talking about the same types of products,” said Mullin. But supporters of the new law said existing state and federal statutes should discourage high-interest, short-term loans that they say can trap low-income Oregonians in a vicious cycle of debt. “There are different regulatory approaches for those institutions,” said Angela Martin, director of Economic Fairness Coalition of Our Oregon, an advocacy group. Martin said the Federal Deposit Insurance Corp. keeps tabs on banks with a reputation for offering high-interest, short-term loans — such as the First Bank of Delaware. The law passed at the just-concluded legislative session caps interest rates at 30 percentage points above the Federal Reserve discount rate, now at 6.25 percent, on consumer loans of less than $50,000. Car title lenders often charge 300 percent annual interest or higher and use the car titles as collateral. The state argued that it has authority to treat consumer lenders differently from banks and credit unions which fall under state and federal regulations. David Leith, an Oregon Department of Justice attorney, said lawmakers were less concerned about financial service companies like banks and credit unions. “The Legislature doesn’t see the same problem with those types of institutions,” said Leith. Supporters of the new law said companies like Northwestern prey on vulnerable low-income Oregonians, trapping them in a cycle of debt by charging exorbitant interest rates. Car title lenders say they are forced to charge high-interest rates because they make loans to people who often default on the money they owe. Current Comments: gosh, poor loan company. Expected to make ends meet charging only 36% interest. Why can't these crybaby liberals leave poor business alone. eggbert - ashland - June 29th, 9:22 PM Banks have offered these types of loans for some time. Wells Fargo has a 30% plus payday loan. I prefer the term predatory lending. paulg - ashland OR - June 29th, 9:43 PM The word "usury" wasn't mentioned once in the entire article. One of the definitions in Merriam-Webster is: an unconscionable or exorbitant rate or amount of interest. Thomas - Ashland - June 30th, 11:44 AM Leave a Comment: Advertisement: Advertisement: Paid Advertising: Debt Help Inkjet Printers Payday Loans Free Ringtones Debt Consolidation Security Systems Debt Relief New Hampshire Primary Advertisement: Copyright © 2007 Ashland Daily Tidings and Ottaway Newspapers. All Rights Reserved. Del.icio.us