ORS Chapter 708a — Regulation of Institutions

ORS 708a.255. Interest rates on loans or uses of money; late charges. (1) Except as otherwise provided in this section, the rate of interest or the amount of other charges that a financial institution may contract for and receive for a loan or use of money is not subject to limitation. (2) If a borrower repays before maturity a loan that an Oregon commercial bank made, the Oregon commercial bank shall refund or credit to the borrower as provided in this subsection the unearned portion of the charges, if any. The amount of the refund may not be less than the total interest contracted for to maturity, less the greater of: (a) Ten percent of the amount financed, or $75, whichever is less; or (b) The interest earned to the installment due date nearest the date of prepayment, computed by applying the simple interest rate of the loan to the actual principal balances outstanding, for the periods of time the balances were actually outstanding. For purposes of computations under this paragraph, the installment due date that precedes the date of prepayment is nearest if prepayment occurs 15 days or less after that installment date. If prepayment occurs more than 15 days after the preceding installment due date, the next succeeding installment due date is nearest the date of prepayment. In determining the simple interest rate, an Oregon commercial bank may apply to the scheduled payments the actuarial method, by which each scheduled payment is applied first to accrued and unpaid interest and any amount remaining is applied to reduce the principal balance. (3) Any installment of an installment loan or payment under an open-end credit arrangement that the borrower does not pay when due continues to bear interest until paid. In addition, if the borrower does not pay the installment or payment when due, the installment or payment may bear a late charge in an amount to which the Oregon commercial bank and the borrower agree. Except for loans secured by real property, an Oregon commercial bank may impose a late charge only if: (a) The Oregon commercial bank does not receive the installment or payment within 10 days after the due date or, if the open-end credit arrangement is a credit card account, the Oregon commercial bank does not receive the payment on or before the due date; (b) The loan agreement or open-end credit arrangement provides for a late charge upon delinquent installments or payments; and (c) The Oregon commercial bank provides a monthly billing, coupon or notice that discloses the date on which installments or payments are due and states that the Oregon commercial bank may impose a late charge if: (A) The Oregon commercial bank does not receive payment within 10 days after the date on which the installment or payment is due; or (B) In the case of an open-end credit arrangement that is a credit card account, the Oregon commercial bank does not receive payment on or before the date on which the payment is due. If the Oregon commercial bank and the borrower have provided in the note or other written loan agreement that the borrower will make payments on the loan by means of automatic deductions from a deposit account that the borrower maintains, this paragraph does not require the Oregon commercial bank to provide the borrower with a monthly billing, coupon or notice on any occasion in which insufficient funds are in the borrowers account to cover the amount of a loan payment on the date the loan payment becomes due and within the periods described in paragraph (a) of this subsection.