Department of Consumer and Business Services
Division of Finance and Corporate Securities

Summary of Related Legislation - 2009 Regular Session

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Repeal Certification of Sellers of Travel - SB 109. The bill eliminates a voluntary certification for Associations of Sellers of Travel. The certification was no longer used and there were no certified associations.

Debt collection practices - SB 328. This bill allows the Attorney General to enforce debt collection statutes and to investigate instances of unfair debt collection practices, such as making threats or calling a borrower repeatedly or at unreasonable hours.

Credit unions - SB 438. The bill creates a new definition for "organization" for defining a credit union field of membership. This allows a corporation, limited liability company, or association, and its directors, employees, or volunteers located in a geographic area to qualify as an organization. The bill increases the maximum loan a credit union may make to member of the credit unions' management without board of directors approval, from $25,000 to $100,000, and limits the combined amount of loans to all such individuals to 10 percent of the credit union's assets. The bill also makes several technical changes.

Foreclosure prevention - SB 628. This bill amends HB 3630 (2008 Session) regarding foreclosure notifications. It adds a requirement that a lender or loan servicer must notify a homeowner facing foreclosure of their right to request a loan modification, including the opportunity for a meeting (face-to-face or by phone) and requires the lender/loan servicer to assess whether the borrower is eligible for a loan modification.

Garnishment of exempt funds - SB 731. The bill provides garnishment protections for exempt funds such as Social Security benefits, veteran's benefits, workers' compensation benefits, and unemployment benefits. Consumers whose benefits are directly deposited in their accounts will not be forced to go to court to recover exempt funds since the funds won't leave the consumer's account.

Tenants in foreclosure - SB 952 (and Sec 1. HB 3004). These bills require advance notice of the foreclosure proceedings and providing protections related to leases and security deposits. The notice will provide information about tenants' rights and assistance resources.

Life-settlement insurance transactions - SB 973. The bill provides additional protections for consumers, particularly seniors, who buy additional life insurance for the purpose of selling or transferring the policy to investors. It requires additional disclosures, protects a consumer's personal financial and medical information and bans certain types of life-settlement transactions.

Mortgage lending practices - HB 2188. This bill prohibits lenders from making negative amortization loans without regard to the borrower's ability to repay, and requires mortgage bankers, mortgage brokers, and loan originators to verify the borrower's income and assets on which the mortgage lender relies when determining ability to repay such loans. It also prohibits a negative amortization loan from having a prepayment penalty after the first 24 months.

The bill requires that when a lender advertises or solicits in a language other than English, and conducts a significant part of the communication about a mortgage loan in that language, the lender must provide the borrower with three translated disclosures: the federal "good faith estimate" required by the Real Estate Settlement Procedures Act (RESPA); the Truth in Lending Act (TILA) disclosures; and a statement explaining that the loan documents will only be provided in English and advising the borrower to obtain assistance with any necessary translations. The department will be providing translations of the required disclosures in Spanish, Russian, and Vietnamese.

Licensing of mortgage loan originators - HB 2189. This bill authorizes Oregon to participate in a national licensing system for mortgage loan originators who work for mortgage bankers, mortgage brokers, and consumer finance lenders. It allows the department to ensure that applicants for this license have met education requirements, passed background and credit checks, following the laws in other states, and are adequately covered by surety bonds. The bill also provides protections for borrowers by allowing the department to enforce updated federal laws regarding disclosures to borrowers and restrictions on misleading advertising.

Debt management services - HB 2191. This bill revises the current registrations for debt consolidating and credit repair services to include a registration requirement for all types of debt management providers, including debt settlement companies and loan modifiers. It prohibits misleading advertising, requires specific disclosures, limits fees that can be charged for these services, prohibits upfront fees, and expands the authority for debtors the right to cancel contracts.

Financial regulation - HB 2199. This bill authorizes DCBS to enter into an information sharing agreement with the Financial Crime Enforcement Network (known as "FinCEN"), a division U.S. Treasury division; changes calculation and timing of the APR limit for consumer finance lenders; eliminates 30-day posting requirement for consumer finance license applications; separates fee rule making for banks, credit unions, and consumer finance; and changes bank holding company reporting.

Debt buyers exempt from registration - HB 2307. The bill allows a person to buy debt to pursue collection of the debt without being registered as a collection agency, as long as the debt buyer does not have any obligation to pay any of the proceeds collected to the original debt holder. The bill was intended to resolve outstanding uncertainties related to a 2004 bankruptcy court decision [In re Krysl, 304 B.R. 425 (Or. 2004).

Pawnbroker fees and notices - HB 2753. This bill authorizes a new fee of up to $3 for replacing a lost, stolen, or destroyed pawn ticket; increases the storage fee to 3%, with a new cap of $100; and clarifies that the $3 fee on a firearm pledge loan may only be charged on new loans. It changes forfeiture notice requirements and defines when a pledge loan is considered a "renewal." It allows local governments that regulate pawnbrokers to impose up to $1.00 on each pledge loan (except for renewals) to pay for costs of administering and enforcing local government tracking systems.

Deficiency judgments after foreclosure - HB 3004. This bill prevents some lenders that foreclosure on borrower with an 80/20 loan from collecting from the second loan when the home sells for less than what the borrower owes. Prior to the mortgage lending crisis, many homebuyers financed 80 percent of the purchase price with a mortgage and trust deed and the remaining 20 percent with second mortgage. However, such arrangements did not have the same protections under Oregon's foreclosure laws as borrowers with a single mortgage loan. This protection from deficiency judgments only applies when both loans were taken out at the time of the purchase and are both held by the same lender.