Oregon Legislature Passes Consumer Protection Bill
The Oregon House of Representatives has passed a bill praised by consumer advocates as providing protection against fraudulent lending practices. House Bill 3706 was only passed after intense debate among legislators, according to a report originally from The Oregonian.
Consumer protection advocates praised the bill as giving the State’s Attorney General the necessary means to pursue companies engaging in unethical lending practices. However, financial institutions such as banks and credit unions said the bill will hike up the cost of business and will not help consumers. Specifically, opponents noted that the bill permits lawyers to accept hefty charges for winning consumer litigation cases against lenders. They also claim that the federal government already regulates abusive lending, which makes the state laws unnecessary. Some legislators said the bill was merely made to sound good and would add another layer of bureaucracy to the process.
However, one proponent of the bill said that it would allow the State’s Attorney General to become a part of multi-state investigations of abusive lending practices. The state of Florida recently announced a $16.9 million agreement that it reached with Countrywide Financial, which will result in payments of $6,000 or more to 2,700 residents of that state. Countrywide was found to have provided misleading information about mortgage rates and participated in other unethical business practices. Proponents also claim the provisions on lawsuits will help consumers in court cases against abusive lenders. The new law would make Oregon the 28th state to regulate lending practices.
The bill had originally died in one committee, but Democratic leadership resurrected it, passing it in another committee before it reached the House floor. Some Republicans claim that Democrats sidestepped the legislative process just to pass the bill and that the bill was not well vetted. The Senate will consider the bill before it becomes law.
Michael Monheit is the managing lawyer at Monheit Law, outside Philadelphia, Pennsylvania. He has practiced law since 1989. Michael Monheit was the managing attorney of the law offices of Herbert Monheit — now Silverman and Fodera — a firm... Michael Monheit→