The City finds that, in order to minimize the detrimental effects that certain payday lending practices have on individuals and families, payday lenders should require payment of a portion of the original loan amount prior to the renewal of a payday loan, borrowers should be able to cancel a payday loan, and borrowers should be able to convert a payday loan into a payment plan.  This Chapter will be construed in conformity with the laws and regulations of the State of Oregon.

1. As used in this Chapter unless the context requires otherwise:
2. A. Borrower means a natural person who receives a payday loan.
3. B. Cancel means to annul the payday loan agreement and, with respect to the payday loan agreement returning the borrower and the payday lender to their financial condition prior to the origination date of the payday loan.
4. C. Director means the City Administrator of designee who carries out the work of  the Revenue Division.
5. D. Payday lender means a “lender” in the business of making payday loans as defined in ORS 725.600.
6. E. Payday loan means a payday loan as defined by state law.
7. F. Principal means the original loan proceeds advanced for the benefit of the borrower in a payday loan excluding any fee or interest charge.
8. G. Revenue Division means, for the purposes of this Chapter, the revenue services and program of the City Administrator under Portland City Code Chapter 3.06, and may be referred to as “Division.”

A payday lender must apply for and obtain a permit to operate as a payday lender in the City. Permits will required for each location a lender operates in the City and must be renewed annually. The application will be in a form to be determined by the Director.  The Director will require the payday lender to report its fee schedule in the payday lenders permit application.  No person may operate a payday lending business or loan any funds as a payday loan without a current permit to do business issued by the City.  The annual cost for the permit is $1,500 or as established by administrative rule and payable to the City.  This permit is in addition to the City of Portland business license required by Chapter 7.02 of this Code.

1. A. The City Administrator is authorized and directed to enforce all provisions of this Chapter.  The City Administrator may investigate all complaints regarding alleged violations of this Chapter.  The City Administrator may delegate the authority granted under this Section to any Revenue Division officer, employee or agent.
2. B. The City Administrator may adopt and enforce administrative rules interpreting and applying this Chapter.  The City Administrator will make written findings of fact and conclusions of law to support all decisions.
3. C. Inspection of records.  The City reserves the right to review and/or copy the records of any payday lender for purposes of auditing or complaint resolution. The records must be made available for inspection during normal business hours within 24 hours of written notice by the Director or its designee.

A payday lender may not renew a payday loan unless the borrower has paid an amount equal to at least 25 percent of the principal of the original payday loan, plus interest on the remaining balance of the payday loan. The payday lender must disclose this requirement to the borrower in a minimum of bold 12-point type.

1. A. A payday lender must cancel a payday loan without any charge to the borrower if, prior to the close of the business day following the day on which the payday loan originated, the borrower:
   1. 1. Informs the payday lender in writing that the borrower wishes to cancel the payday loan and any future payment obligations; and
   2. 2. Returns to the payday lender the uncashed check or proceeds given to the borrower by the payday lender or cash in an amount equal to the principal amount of the payday loan.
2. B. A payday lender must disclose to each borrower that the right to cancel a payday loan as described in this Section is available to the borrower.  The payday lender must disclose this requirement to the borrower in a minimum of bold 12-point type.

1. A. A payday lender and a borrower may agree to a payment plan for a payday loan at any time.
2. B. A payday lender must disclose to each borrower that a payment plan described in this Section is available to the borrower after the maximum number of renewals allowed by state law. The payday lender must disclose this requirement to the borrower in a minimum of bold 12-point type.
3. C. After a payday loan has been renewed to the maximum amount allowed by state law, and prior to default on the payday loan, a payday lender must allow a borrower to convert the borrower's payday loan into a payment plan.  Each payment plan must be in writing and acknowledged by both the payday lender and the borrower.
4. D. The payday lender may not assess any fee, interest charge or other charge to the borrower as a result of converting the payday loan into a payment plan. 
5. E. The payment plan must provide for the payment of the total of payments due on the payday loan over a period of no fewer than 60 days in three or more payments. The borrower may pay the total of payments due on the payment plan at any time. The payday lender may not assess any penalty, fee or other charge to the borrower for early payment on the payment plan.
6. F. A payday lender's violation of the terms of a payment plan entered into with a Borrower under this Section constitutes a violation of this Chapter. If a payday lender enters into a payment plan with a borrower through a third party that is representing the borrower, the payday lender's failure to comply with the terms of that payment plan constitutes a violation of this Chapter.

1. A. Failure to comply with any part of this Chapter or the administrative rules may be punishable by civil penalties.  The City Administrator may impose a civil penalty of up to $1,500for a substantial violation of this Chapter or the administrative rules.  A substantial violation is a violation having an impact on the public that informal compliance methods fail to resolve.  Each substantial violation may be assessed a separate civil penalty.
2. B. Civil penalties will be payable to the City.
3. C. Civil remedies.  Nothing in this Section is intended to prevent any person from pursuing any available legal remedies. 
4. D. No civil penalties will be assessed within 60 days of the effective date of this ordinance. 

Any person upon whom a civil penalty has been imposed or who has been directed by the Director to resolve a complaint may appeal to the Code Hearings Officer pursuant to the provisions of Chapter 22.10 of this Code.

The City Administrator may investigate all complaints alleging violations of this Chapter or administrative rules.

1. A. The City Administrator may receive complaints from borrowers by telephone or in writing.  Within a reasonable time, the City Administrator will forward the complaint by telephone or in writing to the payday lender it concerns for investigation.
2. B. The payday lender must investigate the allegations of the complaint and report the results of the investigation and the proposed resolution of the complaint to the City Administrator by telephone or in writing within two  business days from initial contact by the Director.
3. C. If the proposed resolution is satisfactory to the City Administrator, the payday lender must proceed to resolve the complaint directly with the borrower according to the resolution proposed to the City Administrator.
4. D. If the proposed resolution is not satisfactory to the City Administrator, the City Administrator will conduct an independent investigation of the alleged complaint and propose an alternative resolution of the complaint.  If the payday lender accepts the proposed alternative resolution and offers it to the borrower, the complaint will be final.  If the payday lender refuses to accept and implement the proposed alternative resolution it will be subject to remedies as provided by Section 7.26.080.  In the event of imposition of remedies, the payday lender may appeal as provided by Section 7.26.090.

If any provision of this Chapter or its application to any person or circumstance is declared invalid or unenforceable, the remainder of the Chapter and its application to other persons and circumstances will not be affected and the affected provision of the Chapter will be severed.