New Report on Payday Lending in Portland

Today OSPIRG released a report about the practices of the payday lending industry in the City of Portland. You can read the news release at this link: http://ospirg.org/OR.asp?id2=20550&id4=HP and the report here: http://ospirg.org/OR.asp?id2=20549&id4=HP. Researchers went in-person to payday loan storefronts in the city and inquired about and observed based on a short checklist of consumer information. What we found were staggering interest rates and in almost half of the cases, a lack of compliance with a basic state rule.

Our survey results indicate that in the City of Portland: The most common annual percentage rate charged by payday lenders, based on a $300 loan principal for a full 14-day term is five hundred twenty-one percent (521%).

Twenty-four percent (24%) of lenders surveyed had no visible posting of the annual percentage rate of the loan. An additional twenty-four percent (24%) of lenders surveyed who did post the annual percentage rate of loan, placed the posting in an area which made it difficult to locate and read the posting. Thus, nearly half (48%) of those lenders surveyed either did not visibly post the annual percentage rate (APR) at all or posted it where customers could not easily see it.

The payday lending industry has experienced explosive growth, especially in Oregon. And with our economy the way it has been, and so many Oregon residents at, near, or below the poverty level and living paycheck to paycheck, it is an important time to look at an industry many people have turned to for financial assistance or sometimes even to take the place of having a bank account. Most states have some legislation regulating this industry, to curb the worst abuses or hold in check the bad actors within the industry. Oregon is not one of them.

We hope the report helps to educate consumers who might find themselves applying for one of these loans, as well as state and local leaders interested in finding common sense solutions to protect consumers.

If you have an experience with or perspective on the payday lending industry, leave a comment below.