Payday loan interest is high, but it’s legal, too

Thanks for giving us an easy one, Brenda: Because they can. But there’s a snowball’s chance in Hades that could change soon.

Oregon is one of eight states that don’t regulate such loans — payday loans, car title loans. When annualized, the interest is so high because there’s a set fee for every $100 borrowed, and the terms are usually two weeks to 30 days. Your 371 percent is a relatively good rate. When you borrow $100 and pay even a $12 fee (the lowest we could find) for a few days until your next payday, the rate tops 700 percent.

Senate Bill 545 would limit fees to $15 per $100 (180 percent minimum annualized interest), similar to provisions in force in California and Washington.

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There are two sides to this issue. No one is forcing people to take out the loans and a lot of them are high-risk for the lenders. So why shouldn’t you charge whatever you want? SB 545 supporters argue that that’s just providing a capitalistic rationalization for loan-sharking, with low-income borrowers getting the shaft.

The bill passed the Democrat-controlled Senate on party lines. It’s now in the House, where Republicans are in control, so the bill is in trouble unless enough GOP reps are persuaded.

To say your piece, for or against, contact the House State and Federal Affairs committee: Wayne Krieger, chairman (R-Gold Beach); Jeff Barker, vice-chairman (D-Aloha); Brian Boquist, vice- chairman (R-Dallas); Linda Flores (R-Clackamas); Greg Macpherson (D-Lake Oswego). To find out how to contact them, visit www.leg.state.or.us/house or call 503-986-1000.

Send questions to "Since You Asked," Mail Tribune Newsroom, P.O. Box 1108, Medford, OR 97501; by fax to 541-776-4376; or by e-mail to youasked@mailtribune.com. We’re sorry, but the volume of questions received prevents us from answering all of them.