FOOD for Lane County - Payday loan reform

FOOD for Lane County Joins Statewide Payday Loan Reform Effort

More than a third of all Lane County emergency food box recipients are employed. With rising health care and utility costs and a tight housing market, Lane County’s “working poor” struggle to meet their basic needs on the wages they earn.


	The high fees and interest rates associated with payday loans often lead to an inescapable cycle of debt for the borrower. Some borrowers end up paying more in fees than the original amount of the loan.

Many have turned to payday loan lenders for help. In 2004, Oregon Department of Consumer and Business Services surveyed more than 1,200 payday loan consumers and found that almost a third (30%) had taken out a payday loan to buy groceries. Under current practice, payday loans cost cash-strapped, credit-poor Oregonians millions in triple-digit fees and drive families into a cycle of debt that further strips their scarce financial resources.

Creating Economic Stability for Low-Income Families
Until April 2006, Oregon was one of only 8 states that had no regulation on this industry. During the 2005 Oregon Legislative Session, FOOD for Lane County joined a diverse group of statewide advocates to lobby for payday loan reform.

Proposed legislation to regulate the payday loan industry did not receive a hearing in the House that session, but the issue did garner support in the Senate, and a reform bill passed there, putting the issue squarely on the table for all policy makers.

After the 2005 session, House and Senate subcommittees were formed to look at the issue. Both committee chairs, Representative Debi Farr and Senator Floyd Prozanski, represent Lane County districts, creating a unique opportunity for FOOD for Lane County to engage on policy work at the local level.

In January 2006, FOOD for Lane County Advocacy and Outreach Coordinator Laurie Trieger brought together a broad-based Lane County coalition for payday loan reform. The group included representation from local businesses, members of the faith community, labor organizers, student groups, social service providers, payday loan customers and others.

Oregon Legislature Passes Payday Loan Reform Bill
A payday loan reform bill was introduced and passed during the April 2006 Special Session of the Oregon State Legislature. This July, the Eugene City Council voted unanimously to pass a local payday loan ordinance to provide further protections for payday loan customers.

“Three cheers for Eugene City Councilors and Mayor Piercy and to supporters of the ordinance who came out to testify and offered calls and letters of support,” said Trieger. "This is an important step in creating some economic stability for low-income Lane County households.”

For more information about payday loan reform or FOOD for Lane County's advocacy efforts, call Laurie Trieger at (541) 343-2822 or email ltrieger@foodforlanecounty.org.