Everyone’s strapped for cash at one time or another. Okay, well, maybe not everyone, but let’s say that at least most of the 76 percent of Americans who live paycheck to paycheck struggle financially every now and then when an unexpected expense comes up. For some, a short-term, small dollar loan may mean the difference between feeding their kids sticks and leaves and giving them actual food until payday comes around.
If payday loans are a legal scam, car title loans are legal highway robbery with some well-placed punches thrown in for good measure. Title loans require that you hand over your original vehicle title to the lender (usually along with an extra set of keys so they don’t risk damaging their new vehicle when they come to repossess it) in exchange for a small sum of money. You get to keep driving the car, which is very benevolent of the scumbag entity that’s going to send some underpaid chump to repossess your car if you happen to be the one person out of every six who can’t pay off the loan on time.
Luckily for you, if you live in Oregon, you won’t have to worry about losing your wheels to a title loan gone bad, because Oregon is one of the very few states that regulates title loans to protect its citizens from the abhorrent practices in which these lenders engage.
Predatory Lending at its Worst
Title loans in the 16 states where bothersome regulations aren’t in place to protect consumers against unfathomably high interest rates are huge business in those states. We’re talking $3.6 billion in profits, which are made strictly off the misfortunes of those who are mostly just trying to pay their gas bill so they can cook some dang food and give their kids a warm bath between now and payday. But title lenders give about as much of a fluff about your financial problems as Big Energy does, and that means that once you sign the dotted line on that title loan contract, there’s a 17 percent chance you’re going to pay back three times the amount you took out before losing your car and all of your equity in it when you can’t make that last balloon payment.
Here’s how it works: Say you take out a $1,500 title loan to cover an emergency car repair. The principal, plus interest, will be due in 30 days. Interest rates are usually around 25 percent a month, which doesn’t sound that bad until you realize that 25 percent a month is the equivalent of 300 percent a year. And you thought your credit card’s 18 percent APR was high!
After you roll over the loan eight times like the average borrower does (because it’s taken you that long to scrape together the funds to pay it off) you’ll end up paying back a total of $4,500 for that $1,500 car repair.
Oregon Tells Title Loan Lenders to Stuff It
In 2007, Oregon lawmakers went to bat for the downtrodden and desperate, and they passed four bills to put a stop to the legal pillaging the poor. As a result, the interest rates for title loans and other small dollar predatory loans were capped at 36 percent APR. In addition, lenders can only charge a maximum of $10 in fees per $100 loaned, and the number of times the loan can be renewed or rolled over is restricted to two. And when the loan is rolled over those two times, they can’t charge additional fees, as is standard practice in states that don’t regulate the title lending industry.
Other regulations stemming from the Oregon bills include restricting the lender’s ability to keep charging you interest on the loan once your car is repossessed and making it illegal for the lender to require a spare set of car keys to make repossession that much easier.
But the regulation that probably really got the lenders’ goats was the one that forbade them from making loans to people who are unable to show reasonable proof of their ability to pay back the loan. After all, these guys didn’t get to where they are now, rolling around naked in mountains of C-notes, by lending money to people who might actually be able to pay it back. That would defeat the whole purpose of having that title of ownership, duh.
Title Lenders Tell Oregon to Stuff It
As a result of these “unreasonable” limits, title lenders across the state threw a hissy fit and slammed the door to their room as they flounced about yelling, “I hate you, I hate you, I hate you!” To which Oregon responded with, “Well, if you can’t play nice in Oregon, you don’t get to play.” So the petulant lenders packed their bags and moved in with their loser boyfriend in Idaho.
Hey, that’s an idea! If you still really want to ruin your life for the foreseeable future with a title loan, you can head over to Idaho (or down to Nevada) and give the unregulated title lenders there all of your money and then some, hand over fist.
But instead, why not see if you can get a small, low-interest loan through a credit union or from a well-to-do friend or family member? Or you can check with local charities and churches to see what kind of financial assistance you can get to help you solve your emergency. There are lots of resources out there for people who are struggling to make ends meet, and these organizations aren’t going to give you a small loan to keep your electricity on and then laugh all the way to the bank a few months later while you set up housekeeping under the I-5 bridge.
Oregon Online Title Loans
Currently, there are no licensed online title lenders in Oregon. So before you go and agree to a title loan, visit Oregon’s Division of Financial Regulation website to check the list of Oregon licensed payday and title lenders
Remember that there will be several title lenders who will be promising quick cash that you can get hold of within a day. But, if the lender is not licensed in Oregon, you may pay excessive interest rates and fees.
Also, beware of the following warning signs as you can file a complaint against your lender if you caught them doing any of these:
- If they require your personal bank account information to assess fees, interest rates, or your loan payments terms. Some might even ask for your SSN.
- If they charge more than 36% annual interest rate.
- If they exceed the maximum APR of 153.77%.
- If they ask for a one-time origination fee of more than 10% of your loan amount with a maximum of $30.
- If they don’t explain your fees and interest rates.
- If they refuse to provide a written loan agreement for you to read, agree to, and sign.
- If they propose a loan for less than a month and offer to renew the same loan more than twice.
- If they ask for an upfront fee and request the payment to be made through:
- Prepaid card
- Debit or credit card
- Wire transfer
- Money order
- If they hurriedly try to repossess your car even if you only missed or failed to pay on time once.
Meanwhile, keep in mind that some lenders in Oregon are owned by, or associated with, federally recognized Indian tribes, and may explain that they operate under tribal sovereignty.
Although Oregon tribes are not involved in lending as of today, if you come across this term, tribal sovereignty means that they are separate from the federal or state government. This allows them to charge higher fees and interest rates than those allowed by state laws.
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