OAG 40-78.

• Case Date: October 07, 1940
• Court: Oregon

Oregon Attorney General Opinions 1940. OAG 40-78. 86OPINION NO. 40-78[20 Or. Op. Atty. Gen. 86]Licensees under motor vehicle finance act prohibited from directly or indirectly charging greater rate of interest than 10 per cent per annum on loans of not more than $500, or 2 per cent per month on loans of $500 or less. Limitation of $500 applies whenever aggregate unpaid amount of loan and renewals is in excess of $500.October 7, 1940.Mr. A. A. Rogers,Superintendent of Banks. Dear Sir: Referring to the motor vehicle finance act, chapter 377, Oregon Laws, 1931, as amended by chapter 421,87Oregon Laws, 1935, codified as chapter XXIX of Title XXII, Oregon Code 1935 Supplement, you state:

"Certain licensees under the Act contend that the provisions of Section 21 permit them to make the charges referred to in subparagraphs 1 to 3, inclusive, under 'further or other charges', particularly those authorized by paragraph 3, in addition to interest at a rate of 10% per annum on a loan or loans made to any one person in an aggregate amount in excess of $500. We shall appreciate your informing us whether in your opinion these additional charges can properly be made by a licensee under the circumstances described.

"If such charges cannot properly be made by a licensee would it be necessary for him to refund to a borrower the amount collected for vendor's single interest premium where a loan or loans aggregating less than $500 had been made in good faith in accordance with the terms of the act and an additional loan to the same borrower subsequently increased the aggregate indebtedness to an amount in excess of $500.

"Further, under the circumstances described in the preceding paragraph could the lender charge interest at the rate originally contracted for or at any rate in excess of 10% per annum on any part of the indebtedness subsequent to the date on which the total amount exceeded $500?"

Section 22-2902, Oregon Code 1935 Supplement, makes it unlawful for any person, copartnership, association or corporation

"to engage or continue in the business of making loans on motor vehicles, including those required by law to be registered with the secretary of state, for which there is charged, contracted for or directly or indirectly received any sum or value at a rate in excess of ten (10) per cent per annum, except as authorized by this act

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