Oregon Interest Rates: How Much Can They Charge?

A question frequently asked in law libraries: What is the highest interest rate imposed on debts allowed by Oregon law?

Here is my 2009 (before the end of the current 2009 Legislative Session) answer to the general question, when it comes to me via email.

(Note: if your situation is more complex than trying to figure out what the interest rate on that unpaid parking ticket is going to be, or what to charge your adult child for a car loan, I recommend you talk to an attorney. Answers to questions about interest rates on credit cards, on debts, on child support, on money judgments, etc. need more research than the average person can do “on the web.” NO, no, no – it is NOT all online.)

The very shortest answer to the general question is “It Depends!”

1) A less short and general answer, though maybe not responsive to your exact situation, might be the following, but see Disclaimer, below:

The maximum interest rate that can be charged in Oregon is 9 %. No one can charge more than the maximum rate of 9 % per year — unless the lender is a financial institution. The maximum is specified by 2007 ORS 82.010. The exemptions are in 2007 ORS 82.025. The effect is that if you lend your favorite nephew money you can’t charge more than 9 %. But if you are a bank or any other financial institution (and you will need to look up the statutory definition of “financial institution.”) you can charge any rate you want. Contracts have been written, and signed, at rates exceeding 50 % per year, which should surely give you pause.

When it comes to interest rates, “lawful” is in the eyes of the lawyers and the judges and the Legislators. A greater power may intervene so “stay on the side of the angels” is my advice.

2) There is also a good discussion of interest rates in Section IX (C), page 89, of the “Guide to Doing Business in Oregon” (by lawyers at the Davis, Wright, Tremaine law firm), “Applicability of State Usury Laws,” which you can also link to from the “Lex Mundi Guides to Doing Business Guides” directory. As of today, the latest Oregon guide is dated 2006, so you will need to update it with the 2007 ORS, 2008 Laws (if any), and soon to be 2009 laws (if any).

3) For an answer that is relevant to your specific situation, you will need to do some careful research in the ORS or talk to a lawyer, which we highly recommend (and there is a good reason I keep saying this!). When searching the ORS, use the terms that relate to your specific situation, e.g. “interest,” “loans,” or “consumer finance,” “credit card,” etc. These will lead you to a variety of statutes on this topic, which you will have to sift through to determine which ones apply to your situation.

4) I recommend you also check with an attorney, especially if there is property, family, or a business at stake, not just a hypothetical question. The Oregon State Bar Information and Referral Service has a toll free number to call to locate attorneys in your area; call their referral service at 503-684-3763 or 1-800-452-7636.

5) Last, but not least, if you have additional questions about interest rate policies, you might want to contact your state Legislators who make laws governing lending and interest rates. The Oregon Division of Corporate Finance and Securities, the Consumer Protection Division, and even the Governor’s office all have a role to play in how the state regulates the collection of interest:

a) Oregon State Legislature (and Find Your Legislator)

b) Oregon Division of Corporate Finance and Securities

c) Oregon Consumer Protection Hotline

Disclaimer: It is against state law for library staff members to engage in any conduct that might constitute the unauthorized practice of law (ORS 9.160, 9.166 and 9.21). They may not interpret statutes, cases or regulations, perform legal research, recommend or assist in the preparation of forms, or advise patrons regarding their legal rights. They may, however, assist patrons in locating materials or links that would aid in individual research.