Oregon governor to decide whether to expand AG's powers

Chris Rizo Feb. 24, 2010, 1:33am

Ted Kulongoski (D)

John Kroger (D)

SALEM, Ore. (Legal Newsline)-Oregon Attorney General John Kroger could be just days away from having the statutory authority to prosecute lenders under the Beaver State's consumer protection laws.

That is if Gov. Ted Kulongoski, a Democrat, signs legislation granting the attorney general the authority.

The state's Democratic-led Legislature gave final approval to the plan Tuesday, sending a bill to the governor's desk. If signed by Kulongoski, the measure becomes law immediately.

The proposed state law - outlined in House Bill 3706 -- would put mortgage banks under the state's Unlawful Trade Practices Act. The move would allow the attorney general to prosecute lenders that allegedly mislead their customers when issuing loans or extending credit.

Currently, banks and other lenders are not subject to Oregon's consumer protection law. The bill does not extend to transactions involving a pawnbroker.

"This bill provides protections from lenders that consumers do not currently possess, including the ability to go after national and out-of-state lenders that are not currently regulated in Oregon," state Rep. Paul Holvey, D-Eugene, who carried the proposal on the House floor, said in an earlier statement.

The attorney general's director of communications and policy, Tony Green, told Legal Newsline that Kroger, a former federal prosecutor, supports the bill so his office may "protect consumers from predatory lending tactics."

The proposal cleared the Oregon House of Representatives last week on a 35 to 25 vote. The state Senate approved the bill Tuesday 18 to 12, with Republicans objecting to the plan.

Among Republicans who voted "no" was Sen. Chris Telfer of Bend. She said the law would unfairly expose lenders to liability.

"We're going to damage the economy even further as it struggles to recover," she said, noting that the bill would also increase costs for lenders to do business in Oregon.

From Legal Newsline: Reach staff reporter Chris Rizo at chrisrizo@legalnewsline.com.

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